EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712310
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.
ASA-DGS Pty Ltd applied for a TCO in respect of certain wine bottle cap discs on 31 July 2007.
Instrument
TCO No 0712310 was made on 9 October 2007. It declares that those certain wine bottle cap discs 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. 0712310 is taken to have come into force on 31 July 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 was enacted to facilitate the administration of customs and excise duties and to provide a framework for the regulation of international trade. The Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on goods specified in the order, provided certain criteria are met. The problem this legislation addresses is the potential for higher customs duties on goods that are not produced in Australia or for which there are no suitable Australian alternatives, which could otherwise hinder trade and increase costs for importers. The relevant legislature, the Parliament of Australia, enacted this Act to ensure a fair and competitive marketplace by providing tariff relief where appropriate.
The explanatory statement outlines Tariff Concession Instrument No. 0712310, which was introduced to provide a tariff concession for certain wine bottle cap discs. This instrument was made under the authority of section 269C of the Customs Act 1901, after an application was made by ASA-DGS Pty Ltd on 31 July 2007. The CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. The policy objective of this concession is to reduce the duty on these specific wine bottle cap discs from the general rate of 5% to 0%, benefiting importers who can now apply for a refund of duty on goods imported since the date the TCO came into force, which is 31 July 2007. This measure is designed to support trade and reduce costs for businesses importing these goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for issuing Tariff Concession Orders (TCO) that apply a lower rate of customs duty to certain goods. This Act applies to individuals and entities who wish to apply for a TCO for goods that are not specified in section 269SJ of the Act, which details those goods that cannot be subject to a TCO. The application process is overseen by the Chief Executive Officer of Customs (CEO), who evaluates whether the application meets the core criteria, such as the absence of substitutable goods produced in Australia at the time of the application. The geographic reach of this Act is national, impacting importers and exporters across Australia. The Act also stipulates that the TCO does not affect any pre-existing rights of persons other than the Commonwealth and does not impose any new liabilities. Notably, the Act allows for the scope of application to be extended or restricted through subordinate instruments, facilitating adjustments to the scheme as needed.
Key Provisions
The Customs Act 1901 sets out a scheme under which Tariff Concession Orders (TCOs) can be made, as detailed in Part XVA. Specifically, section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO regarding certain goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which are ineligible for TCOs, the CEO must then assess whether the application meets the core criteria outlined in section 269C. For an application to meet these criteria, there must be no substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations imposed by the Act on parties include the requirement for an applicant to demonstrate that the goods for which they seek a TCO are not substitutable by any goods produced in Australia. This involves proving that no equivalent goods exist that could serve the same purpose or design use as the goods in question. The CEO has a duty to assess such applications and, if they meet the criteria, to issue a written TCO specifying that the goods are subject to a lower customs duty rate as outlined in the Customs Tariff Act 1995. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. In this case, no submissions were received, indicating a lack of opposition to the TCO.
The Act provides for specific consequences and penalties in the event of non-compliance with the TCO provisions. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 generally may lead to civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines and other monetary penalties, while criminal penalties may result in imprisonment. The exact penalties would be determined in the context of the specific breach, but the Act empowers the CEO to enforce compliance through the issuance and enforcement of TCOs. This legal framework ensures that the rights of importers are protected and that any duties owed are correctly calculated and refunded where applicable.