EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802664
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.
Multix Pty Ltd applied for a TCO in respect of certain aluminium foil on 07 April 2008.
Instrument
TCO No 0802664 was made on 27 June 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. 0802664 is taken to have come into force on 07 April 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, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) to provide relief from certain customs duties. The 2008 Tariff Concession Instrument No. 0802664 was introduced to address a specific application by Multix Pty Ltd for tariff concessions on certain aluminium foil. The objective of the legislation, as stated in the explanatory statement, is to facilitate tariff concessions where no substitutable goods are produced in Australia, thereby reducing the customs duty rate for specified goods. The process involves an application to the Chief Executive Officer of Customs, who must assess whether the application meets the core criteria and publish a notice in the Gazette for public submissions. In this case, no submissions were received, and the tariff concession was granted, effective from the date of the application. This mechanism ensures that importers of the specified goods can benefit from the reduced duty rate and potentially apply for refunds on duties paid prior to the concession's enactment.
Scope and Application
The Customs Act 1901, specifically through its Tariff Concession Orders (TCOs) mechanism, applies to entities or individuals seeking tariff concessions on imported goods, provided such goods do not fall under the restricted categories outlined in section 269SJ of the Act. The application of a TCO hinges on the absence of substitutable goods produced in Australia, as defined by sections 269C, 269D, and 269E of the Act. This process involves the Chief Executive Officer of Customs (CEO) assessing the application against these criteria. Once a TCO is made, it applies nationally and comes into force on the date the application is lodged, as stipulated in section 269S(1) of the Act. Notably, the TCO does not disadvantage existing parties or impose liabilities for actions taken prior to its registration. This legislative framework allows for the reduction or exemption of customs duties, impacting importers of specified goods positively by potentially entitling them to refunds of duties paid on those goods since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0802664 under the Customs Act 1901 provides a detailed framework for granting tariff concessions on certain goods. Section 269C (2) of the Act outlines that a Tariff Concession Order (TCO) can be made if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for such a concession, and if the application does not pertain to goods specified in section 269SJ, the CEO must assess whether the application meets the core criteria. In the case of Multix Pty Ltd's application for a TCO on certain aluminium foil, the CEO was satisfied that no substitutable goods were being produced in Australia, leading to the issuance of TCO No. 0802664 on 27 June 2008.
The obligations imposed on parties applying for a TCO, as stipulated in section 269K(1) of the Act, require the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application. This notice invites any person who believes there are reasons why the TCO should not be made to submit their views. Section 269S(1) specifies that the TCO comes into force on the day the application for the TCO was lodged, which in the case of Multix Pty Ltd was 7 April 2008. Importantly, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person (other than the Commonwealth) in respect of anything done or omitted before the registration date.
Section 269S(2) of the Act provides that a TCO does not disadvantage any person or impose liabilities on any person for actions taken prior to the registration date. Section 126(1)(r) of the Regulations further supports this by allowing importers to apply for a refund of duty on goods imported since the day the TCO came into force. For TCO No. 0802664, the general rate of duty on the specified aluminium foil is reduced to free, thereby providing a significant benefit to importers of these goods. There are no provisions within the Act that detail specific offences, penalties, or civil/criminal consequences for breach related to the issuance or application of a TCO.