EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801160
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.
Techni Chem Australia Pty Ltd applied for a TCO in respect of certain aluminium foil laminates on 18 January 2008.
Instrument
TCO No 0801160 was made on 04 April 2008. It declares that those certain aluminium foil laminates 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. 0801160 is taken to have come into force on 18 January 2008.
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, as supplemented by Tariff Concession Instrument No. 0801160 enacted in 2008, aims to address the issue of providing tariff concessions for specific goods where no substitutable products are produced within Australia. This legislative instrument facilitates the application process for tariff concessions, allowing the Chief Executive Officer of Customs to grant lower rates of customs duty on goods that meet certain criteria, thus supporting businesses by reducing their import costs. The instrument was enacted by the Australian Parliament to streamline the application process for tariff concessions, ensuring that businesses can more easily access duty-free or reduced-duty goods that are not locally produced, thereby promoting economic efficiency and competitiveness.
The instrument was introduced to ensure that the process of obtaining tariff concessions is transparent and accessible, providing a clear pathway for businesses to apply for and receive duty reductions on goods not manufactured domestically. The policy objective is to foster economic growth by making imported goods more affordable, thus supporting industries that rely on imported materials and encouraging the efficient use of resources within the Australian market. The instrument does not disadvantage any existing rights holders or impose new liabilities on individuals or entities, aligning with the broader legislative intent to support fair trade practices.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) that provide lower rates of customs duty on specified goods. This Act applies to any individual or entity seeking tariff concessions on goods imported into Australia, ensuring they meet the criteria outlined in the Act. The Act's jurisdiction extends nationally, covering all imports into Australia, and it operates within the broader regulatory structure established by the Customs Act and the Customs Tariff Act 1995. Exclusions from TCOs include goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The CEO must also ensure that the application does not pertain to goods that are already being produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F of the Act. The application process involves a public notice in the Gazette, inviting submissions from interested parties, although in the case of TCO No 0801160, no submissions were received. The TCO applies retroactively from the date the application was lodged, providing relief to importers without imposing new liabilities or disadvantaging existing rights holders.
Key Provisions
The Tariff Concession Instrument No. 0801160, made under the Customs Act 1901, concerns the application of a Tariff Concession Order (TCO) to certain aluminium foil laminates. According to section 269F of the Act, Techni Chem Australia Pty Ltd applied for a TCO for these goods, and the Chief Executive Officer of Customs (CEO) determined that the application met the core criteria outlined in section 269C. This assessment was based on the fact that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as required by section 269P(3). The TCO, therefore, applies the free rate of duty to these goods, whereas the general rate would be 5% (section 269P(3)).
The obligations imposed by the Act on the parties involved include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this case, the CEO did not receive any submissions in response to the published notice. Additionally, the TCO is to be taken to have come into force on the day the application for the TCO was lodged, which in this instance was 18 January 2008 (subsection 269S(1)). The TCO does not affect the rights of any 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.
In terms of penalties and consequences for breach, the Customs Act 1901 does not explicitly state any specific offences, penalties, or civil/criminal consequences for failing to comply with the requirements of the TCO. However, non-compliance with the terms of a TCO or any other provision of the Customs Act may result in penalties under other sections of the Act. For example, section 143 of the Customs Act provides for various penalties, including fines and imprisonment, for breaches such as incorrect declarations, smuggling, and evading duty. These penalties vary depending on the nature and seriousness of the breach.