EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803407
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.
Sic Swiss Import Corporation Pty Ltd applied for a TCO in respect of certain beverage bottle on 29 February 2008.
Instrument
TCO No 0803407 was made on 16 May 2008. It declares that those certain beverage bottles 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. 0803407 is taken to have come into force on 29 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. 0803407, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods where no substitutable goods are produced in Australia. This instrument was introduced to facilitate the application of a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO), thereby promoting trade and economic efficiency by making certain goods more affordable to Australian consumers and businesses. The instrument was created by the Chief Executive Officer of Customs, following an application by Sic Swiss Import Corporation Pty Ltd for certain beverage bottles. The decision to grant the concession was made on the basis that no substitutable goods were being produced in Australia, thus meeting the core criteria set out in the Act. The instrument came into effect on 29 February 2008, the date the application was lodged, and it ensures that the rights of importers are protected and that no new liabilities are imposed on any party.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO) to apply reduced rates of customs duty on specific goods. This Act applies to individuals and entities seeking tariff concessions for goods that are not produced domestically and for which no suitable substitute is available. The geographic reach of this Act extends nationally, as it pertains to the Commonwealth of Australia and its customs regulations. The Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ, and requires that applications meet core criteria such as the absence of domestic production of substitutable goods, as stipulated in sections 269C and 269D of the Act. The application process involves public consultation, where the CEO invites submissions from any interested parties, although in this instance, no objections were received. The TCO takes effect on the date the application is lodged, benefiting importers by potentially allowing them to claim refunds for duties paid on imports before the TCO's effective date.
Key Provisions
The Customs Act 1901, particularly under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. These orders apply a lower rate of customs duty to specific goods (sections 269F and 269P(3)). Section 269C of the Act stipulates that for an application to meet the core criteria, no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of "goods produced in Australia", "ordinary course of business" and "substitutable goods" are provided in sections 269D, 269E and 269B, respectively. TCO No. 0803407, made on 16 May 2008, pertains to certain beverage bottles, declaring them subject to a zero rate of duty as no substitutable goods were produced in Australia, with the general duty rate being 5%.
The obligations under this Act for parties or entities involve ensuring that any goods for which a TCO is sought are not substitutable by any domestically produced items. The CEO must also publish a notice in the Gazette inviting submissions on the TCO application, as per section 269K(1). In this case, no submissions were received, and the TCO is effective from the date the application was lodged, 29 February 2008, under subsection 269S(1). This TCO does not affect the rights of any person adversely as of the registration date, nor does it impose any liabilities on persons other than the Commonwealth.
Failure to comply with the provisions of the Customs Act 1901 or the regulations could result in civil or criminal penalties. For instance, incorrect classification of goods or fraudulent claims regarding tariff concessions might be considered an offence. The penalties for breaches of the Customs Act can vary, with potential maximum penalties specified in other sections of the Act or associated regulations, although the specific penalties for this TCO are not outlined in the explanatory statement.