EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0800592
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 Ltd applied for a TCO in respect of certain aluminium foil on 19 December 2007.
Instrument
TCO No 0800592 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. 0800592 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 Customs Act 1901, enacted by the Australian Parliament, was introduced to establish a framework for the administration of customs duties and related regulations. One of its mechanisms is the Tariff Concession Order (TCO), which allows for the reduction of customs duty on certain goods under specific circumstances. The problem or gap addressed by this legislation is the need to provide tariff concessions to importers of goods that are not produced in Australia, thus ensuring fair competition and supporting industries that rely on imported raw materials. This specific TCO, Instrument No. 0800592, was introduced to address the application by Confoil Pty Ltd for tariff concessions on certain types of aluminium foil, which was subsequently granted because no substitutable goods were being produced in Australia. The policy objective is to promote economic efficiency by reducing the cost of imported goods that have no local equivalent.
Scope and Application
The Tariff Concession Instrument No. 0800592 under the Customs Act 1901 applies to the specific goods—certain aluminium foil—that are the subject of the application by Confoil Pty Ltd. This Instrument was made by the Chief Executive Officer of Customs, following an application for a Tariff Concession Order (TCO) that met the core criteria stipulated in the Act. The TCO applies to the aluminium foil specified in the Instrument, which was determined to have no substitutable goods produced in Australia. The primary effect of this Instrument is to alter the customs duty rate for the specified aluminium foil from the general rate of 5% to free, thus benefiting importers of these goods by potentially allowing them to apply for a refund of any duty paid on these goods since the TCO's effective date. The application of the TCO is national in scope, governed by the Commonwealth, and it does not disadvantage or impose liabilities on any person other than the Commonwealth. The TCO does not extend to goods specified in section 269SJ of the Customs Act 1901, which lists those goods that cannot be subject to a TCO. The commencement of this TCO is effective from 19 December 2007, the date the application was lodged.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines a framework through which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) (sections 269C, 269F, 269SJ, and 269P). An application for a TCO can be submitted to the CEO by a person, and if the CEO determines that the application is not for goods specified in section 269SJ, they must assess whether the application meets the core criteria in section 269C. These criteria include the condition that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995, thus applying a prescribed duty rate (section 269P(3)).
The obligations imposed by the Act on the CEO include accepting valid applications, assessing them against the core criteria, and issuing TCOs when appropriate. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In the case of TCO No. 0800592, the CEO did not receive any submissions in response to the published notice.
Breaching the requirements set forth in the Customs Act 1901 may result in various consequences. The Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for breaches in the context of TCOs. However, general breaches of the Customs Act could potentially incur civil or criminal penalties, depending on the nature and severity of the breach. The maximum penalties for breaches of the Customs Act are not specified in this particular explanatory statement but could include fines, imprisonment, or both, under other sections of the Act or relevant regulations.