EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803249
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.
The Castaway Foil Co Pty Ltd applied for a TCO in respect of certain aluminium foil on 26 February 2008.
Instrument
TCO No 0803249 was made on 9 May 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. 0803249 is taken to have come into force on 26 February 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 other import charges, including the ability to grant tariff concessions on certain goods through Tariff Concession Orders (TCOs). The introduction of TCOs addresses the need to provide relief from customs duties for imported goods where no suitable domestic alternatives exist. The explanatory statement for Instrument No. 0803249, made under the Customs Act 1901, clarifies that the Chief Executive Officer of Customs (CEO) may issue a TCO if satisfied that the application meets the core criteria, specifically that no substitutable goods are produced in Australia. In this instance, the Castaway Foil Co Pty Ltd applied for a TCO on certain aluminium foil, resulting in Instrument No. 0803249 which was issued on 9 May 2008, declaring the aluminium foil to be subject to a free duty rate under the Customs Tariff Act 1995. The instrument was effective from the date of the application, 26 February 2008, and does not adversely affect any rights or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0803249, issued under Part XVA of the Customs Act 1901, applies to the specific case of the Castaway Foil Co Pty Ltd’s application for a Tariff Concession Order (TCO) concerning certain types of aluminium foil. The Act provides a mechanism by which the Chief Executive Officer of Customs can grant TCOs to lower customs duty rates for specified goods, provided the application meets certain criteria and no substitutable goods are produced in Australia. The instrument specifically grants the Castaway Foil Co Pty Ltd a concession where the general rate of duty on the aluminium foil is 5%, but under the TCO, it is free. This concession is effective from the date of the application, 26 February 2008, and does not retroactively affect the rights or impose liabilities on any person except the Commonwealth. The application process requires publication in the Gazette to allow for any objections, although none were received in this instance. The scope of the Act is thus limited to the specific goods and application in question, with the TCO being a targeted measure to benefit the rights of importers by potentially allowing for duty refunds on imports since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0803249 (the Instrument) pertains to Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Specifically, the Instrument concerns a TCO application made by Castaway Foil Co Pty Ltd for certain aluminium foil, which was accepted and processed by the Chief Executive Officer of Customs (the CEO) on 9 May 2008. The Instrument declares that the aluminium foil in question are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the general rate of duty on these goods set at 5% and a concessional rate of duty of free under the TCO.
Under section 269F of the Act, an application for a TCO must be made to the CEO, who is required to determine whether it meets the core criteria set out in section 269C. If the CEO determines that no substitutable goods were produced in Australia on the day the application was lodged, as defined by section 269D, and that the goods were produced in the ordinary course of business as per section 269E, the CEO must issue a written TCO. The Instrument confirms that the CEO was satisfied that no substitutable goods were produced in Australia, hence the TCO was issued.
The obligations imposed by the Act on the parties involve ensuring that any TCO applications comply with the criteria outlined in the Act. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed. However, in this case, no submissions were received. Furthermore, the CEO must ensure that the TCO does not affect any existing rights or impose liabilities on any person in relation to actions taken before the TCO's registration date.
There are no specific offences or penalties mentioned in the explanatory statement concerning the breach of the TCO or the Act. However, general provisions of the Customs Act 1901 apply, which could include penalties for non-compliance with customs regulations. The maximum penalties for breaches of the Customs Act can include fines and imprisonment, depending on the severity and nature of the offence. Importers, however, can apply for a refund of duty on goods imported since the TCO came into force under the regulations.