EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707053
Customs Act 1901
Background
Part XVA of the Customs Act 1901 (the Act) sets out a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). A lower rate of customs duty applies to goods that are the subject of a TCO.
Under section 269F of the Act, a person may apply to the CEO for a TCO in respect of goods. If the CEO is satisfied that the application is not in respect of goods specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO, the CEO must decide whether the application meets the core criteria.
Section 269C of the Act provides that a TCO application meets the core criteria if, on the day on which the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B of the Act provides that ‘goods produced in Australia’ has the meaning given by section 269D, ‘ordinary course of business’ has the meaning given by section 269E and ‘substitutable goods’ in respect of goods the subject of a TCO application, means goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use (including a design use) to which the goods the subject of the application can be put.
Subsection 269P(3) of the Act provides that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order (a TCO) declaring that the goods the subject of the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) specified in the order applies.
Amcor Packaging Australia Pty Ltd applied for a TCO in respect of certain aluminium slug sorters on 11 May 2007.
Instrument
TCO No 0707053 was made on 27 July 2007. It declares that those certain aluminium slug sorters are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that no substitutable goods were produced in Australia. The general rate of duty on these goods is 5%. The rate of duty for the goods subject to the TCO is 0%.
Consultation
Subsection 269K(1) of the Act provides in part that as soon as practicable after accepting a TCO application as a valid application, the CEO must publish a notice in the Gazette which includes an invitation to any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. The CEO did not receive any submissions in response to this invitation.
Commencement
Subsection 269S(1) relevantly provides that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. TCO No. 0707053 is taken to have come into force on 11 May 2007.
The TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities on a person (other than the Commonwealth) in respect of anything done or omitted to be done before the date of registration. The rights of importers will be beneficially affected. Under paragraph 126(1)(r) of the Regulations, importers of such goods will be able to apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force. The TCO does not impose any liabilities on any person.
Overview
The Customs Act 1901, enacted by the Australian Parliament, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative instrument was designed to address the need for targeted tariff relief on specific goods, ensuring that Australian businesses can access essential materials at reduced costs without unduly burdening the domestic market. Specifically, the Act allows for the application of lower customs duties on goods specified in a TCO, provided no substitutable goods are produced in Australia. The policy objective behind this is to facilitate the efficient operation of businesses by reducing the cost of importing necessary goods. In this context, Tariff Concession Instrument No. 0707053 was introduced to provide a zero per cent duty rate for certain aluminium slug sorters, as no suitable Australian-made alternatives were identified.
Scope and Application
The Customs Act 1901 applies to the application process for Tariff Concession Orders (TCOs) for goods that may receive a lower rate of customs duty. This Act allows for the application of tariff concessions for goods that are not produced in Australia in the ordinary course of business, provided they meet specific criteria and do not fall under the goods listed in section 269SJ, which are ineligible for TCOs. The application process is overseen by the Chief Executive Officer of Customs, who must consider whether the application meets the core criteria, notably the absence of substitutable goods produced in Australia. Once a TCO is made, it applies retroactively from the date of the application, and any importers of the goods can apply for a refund of duties paid since that date, while ensuring no adverse impact on the rights of any person other than the Commonwealth. The application of the Act is national in scope, extending across Australia under the authority of the Commonwealth.
Key Provisions
The Customs Act 1901 includes provisions for Tariff Concession Orders (TCOs) under section 269F (s. 269F), which allow for a lower rate of customs duty on specified goods. The CEO of Customs can make a TCO if the application for it meets the core criteria, specifically if no substitutable goods were produced in Australia on the day the application was lodged (s. 269C). Section 269B further defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the CEO determines that the application meets these criteria, they must issue a TCO as a written order (s. 269P(3)). In the case of Amcor Packaging Australia Pty Ltd, TCO No. 0707053 was issued on 27 July 2007, applying to certain aluminium slug sorters with a reduced duty rate from 5% to 0%.
Entities and individuals subject to the Act have several obligations and requirements. They must ensure that any application for a TCO adheres to the core criteria, particularly that no substitutable goods were produced in Australia on the date of application. Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be issued (s. 269K(1)). The CEO must also consider any submissions received before making a final decision on the TCO. Importers who benefit from a TCO may apply for a refund of duty on goods imported since the TCO was taken to have come into force (Reg. 126(1)(r)).
Failure to comply with the requirements of the Customs Act 1901 can result in various civil and criminal consequences. For instance, if an entity knowingly provides false information in an application for a TCO, they may face penalties under the Act. The exact nature of these penalties is not specified in the document, but it is likely that they could include fines or other civil penalties. Additionally, if the breach involves intentional misrepresentation or fraud, it may also attract criminal penalties, such as imprisonment. However, the specific maximum penalties are not detailed in the provided text. The Act does ensure that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, and it does not impose any new liabilities on these persons.