EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803737
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.
Empire Resources Pacific Ltd applied for a TCO in respect of certain aluminium foil on 07 March 2008.
Instrument
TCO No 0803737 was made on 30 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. 0803737 is taken to have come into force on 07 March 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. 0803737, enacted in 2008, amends the Customs Act 1901 to provide a concessional rate of customs duty for certain aluminium foils. This was introduced to address the issue of potentially uncompetitive Australian goods in the market due to higher tariffs. The instrument was enacted by the Chief Executive Officer of Customs, who is mandated under section 269F of the Customs Act to make Tariff Concession Orders (TCOs) when certain criteria are met. The policy objective of this legislative instrument is to reduce the duty on specific goods to a free rate, thus promoting competitive pricing for Australian businesses and consumers. The instrument became effective on the date the application was lodged, 7 March 2008, and did not disadvantage any person or impose liabilities on anyone for actions taken before its enactment.
Scope and Application
The Tariff Concession Instrument No. 0803737, established under Part XVA of the Customs Act 1901, pertains to the application and administration of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any individual or entity that seeks a TCO for specific goods, ensuring that such goods can benefit from a reduced rate of customs duty as outlined in the Customs Tariff Act 1995. The scope of this legislation is broad, encompassing any industry or entity involved in the importation of goods that may qualify for tariff concessions, provided that the goods do not fall under the categories specified in section 269SJ of the Act, which are ineligible for TCOs. The geographic reach of this Act is national, affecting all importers across Australia, and it is subject to the overarching authority of the Commonwealth. The Act does not impose any disadvantage or liabilities on persons other than the Commonwealth regarding activities conducted prior to the TCO's registration date. Notably, the Act extends its application through subordinate instruments, allowing for the detailed regulation and administration of tariff concessions.
Key Provisions
The key operative sections of this legislation (sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ) establish a framework for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. If an application for a TCO is made under section 269F and it does not relate to goods excluded by section 269SJ, the CEO must determine whether the application meets the core criteria (section 269C). These criteria require that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (sections 269B, 269D, and 269E). If the CEO is satisfied that the application meets these criteria, they must issue a written TCO under section 269P(3) specifying that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. For instance, in this case, the CEO issued TCO No. 0803737 on 30 May 2008, which declared that certain aluminium foils were subject to a free rate of duty, as no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved. The CEO must, as soon as practicable after accepting a TCO application as valid, publish a notice in the Gazette inviting any interested persons to submit objections (subsection 269K(1)). If no submissions are received, the CEO must proceed with issuing the TCO if the core criteria are met. The Act also requires that the TCO be taken to have come into force on the date the application was lodged (subsection 269S(1)). Importantly, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on such persons (subsection 269S(2)).
Breaches of the provisions within this legislation may not be explicitly outlined in the explanatory statement, but general legal principles apply. If any party fails to comply with the obligations set out by the Customs Act 1901, they could potentially face civil or criminal consequences. For example, failure to comply with the notice requirements could lead to challenges in court regarding the validity of the TCO. Additionally, any person found to have circumvented the TCO by importing substitutable goods when they should not have been able to do so might face penalties under other sections of the Customs Act 1901, such as fines or imprisonment, although the maximum penalties are not specified within this explanatory statement. The precise consequences would depend on the nature and extent of the breach, as well as any relevant case law.