EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718749
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.
Confoil Pty Limited applied for a TCO in respect of certain aluminium foil on 19 December 2007.
Instrument
TCO No 0718749 was made on 14 March 2008. It declares that those certain aluminium foil 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 free.
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. 0718749 is taken to have come into force on 19 December 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 Tariff Concession Instrument No. 0718749, made under the Customs Act 1901, was enacted in 2008 to address the need for tariff concessions on specific goods, allowing for a reduction or waiver of customs duty. This instrument was introduced to facilitate the application process for tariff concessions, ensuring that certain goods eligible for concessionary treatment are identified and appropriately taxed. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders when an application is deemed to meet the core criteria, particularly when no substitutable goods are produced in Australia. The policy objective of this legislation is to provide a streamlined mechanism for tariff concessions, benefiting importers by potentially reducing their duty liabilities on specified goods.
Scope and Application
The Tariff Concession Instrument No. 0718749, which pertains to the Customs Act 1901, applies to goods specified in the instrument, namely certain aluminium foil, and to any entities or individuals who import these goods into Australia. The Act facilitates the process of applying for and receiving tariff concessions for goods, allowing for a reduction in customs duty rates. This is particularly relevant for businesses involved in the importation of these goods, as it can significantly affect their costs. The scope of the Act is national, impacting all importers across Australia, as it operates under the jurisdiction of the Commonwealth. Exclusions to the tariff concessions are clearly outlined in section 269SJ of the Act, which specifies the goods that cannot be subject to a TCO. The Act also allows for the extension of its application through subordinate instruments, which can further define the specifics of tariff concessions and their administration. The commencement of the TCO is deemed to be from the date the application was lodged, providing immediate effect upon registration.
Key Provisions
The main operative sections of the Customs Act 1901, as detailed in the Explanatory Statement for Tariff Concession Instrument No. 0718749, involve the establishment and application of Tariff Concession Orders (TCOs) under section 269F (2). When an individual or entity applies for a TCO in respect of goods, the Chief Executive Officer of Customs (CEO) must determine if the application meets the core criteria outlined in section 269C, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, the CEO must then issue a written order (a TCO) as per section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. In the case of TCO No. 0718749, this instrument was made on 14 March 2008 and applied to certain aluminium foil, reducing the duty from 5% to free, effective from 19 December 2007.
The Customs Act 1901 imposes several obligations on the parties it governs. The CEO is required to assess TCO applications against the core criteria (section 269C), ensuring that the goods in question do not have substitutable counterparts produced domestically. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties as soon as practicable after accepting a valid TCO application (subsection 269K(1)). This publication ensures transparency and provides an opportunity for stakeholders to voice their concerns. For applicants, the obligation is to provide accurate and comprehensive information to substantiate their claims, ensuring that the application meets the specified criteria. The Act also stipulates that the rights of persons, other than the Commonwealth, are not adversely affected by the registration of a TCO, protecting existing rights and obligations.
Under the Customs Act 1901, breaches of the provisions governing TCOs can result in specific penalties and consequences. While the explanatory statement does not detail specific offences, penalties, or consequences for breach of the TCO provisions, the Act generally provides for both civil and criminal penalties for non-compliance with customs regulations. Civil penalties may include fines and other monetary penalties, while criminal penalties can include imprisonment. The maximum penalties will depend on the nature and severity of the breach. For instance, knowingly making a false statement in an application or providing misleading information could lead to both civil and criminal sanctions, reflecting the seriousness of such actions in the context of customs regulation and duty avoidance.