EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803252
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.
Cantarella Bros Pty Ltd applied for a TCO in respect of certain aluminium foil on 26 February 2008.
Instrument
TCO No 0803252 was made on 16 May 2008. It declares that those certain aluminium foils 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. 0803252 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 Tariff Concession Instrument No. 0803252 was enacted under the Customs Act 1901 with the aim of providing tariff concessions for specific goods, thereby facilitating more competitive pricing and potentially stimulating economic activity related to these goods. This instrument was introduced to address the problem of ensuring that Australian businesses have access to competitively priced imported goods, which can be critical for manufacturing and other sectors that rely on such imports. The instrument allows the Chief Executive Officer of Customs to grant tariff concessions on certain goods if it is determined that there are no substitutable goods produced in Australia. The policy objective, as outlined in the explanatory statement, is to ensure that Australian businesses are not disadvantaged by higher customs duties on imported goods for which there are no domestic alternatives.
The instrument was made on 16 May 2008 following an application by Cantarella Bros Pty Ltd for a tariff concession on certain aluminium foils. The instrument declares that these aluminium foils are subject to a tariff rate of free duty, down from the general rate of 5%, as no substitutable goods were produced in Australia. The instrument came into force on the date of the application, 26 February 2008, and does not affect the rights of any person adversely or impose any new liabilities. This legislative measure aims to support the competitive position of Australian businesses by reducing the cost of importing specific goods.
Scope and Application
The Tariff Concession Instrument No. 0803252, pursuant to Part XVA of the Customs Act 1901, applies to any person who makes an application for a Tariff Concession Order (TCO) in relation to specific goods, provided these goods are not those prohibited from concession under section 269SJ of the Act. The Chief Executive Officer of Customs (CEO) is responsible for assessing the application against the core criteria outlined in section 269C, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business. This concession affects the importation of certain aluminium foils, granting them a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995, whereas the general rate of duty on such goods is 5%. The instrument was made on 16 May 2008 following an application by Cantarella Bros Pty Ltd on 26 February 2008, and it took effect from the date of the application under subsection 269S(1) of the Act. The TCO does not impose any liabilities or disadvantage any person other than the Commonwealth, and importers of the affected goods can apply for duty refunds for imports since the effective date of the TCO.
Key Provisions
The Customs Act 1901 provides a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA, which allows for a reduced rate of customs duty on specific goods. A TCO can be applied for by any person under section 269F, provided the goods in question are not excluded by section 269SJ. The Chief Executive Officer of Customs (CEO) is responsible for determining whether an application meets the core criteria as outlined in section 269C. This requires that, on the date of the application, no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring that the specified goods are subject to a reduced duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties and entities primarily concern the process for applying for and receiving a TCO. The applicant must ensure that the goods do not have substitutable alternatives produced in Australia at the time of application. The CEO is obligated to publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid, as per subsection 269K(1). If no objections are received, the CEO must proceed to issue the TCO. Additionally, the TCO does not retroactively affect the rights of any party, except to the benefit of importers who can claim duty refunds for goods imported since the TCO's effective date.
In terms of consequences for breach, the Act does not specify explicit offences or penalties for non-compliance with the TCO provisions. However, any misuse or fraudulent application for a TCO could potentially lead to legal actions under other relevant sections of the Customs Act, which might include fines and imprisonment. The primary focus of the Act is to ensure a transparent and fair process for applying for and receiving tariff concessions, with the aim of benefiting importers of the specified goods by reducing their duty obligations.