EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803846
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 7 March 2008.
Instrument
TCO No 0803846 was made on 30 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. 0803846 is taken to have come into force on 7 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. 0803846, enacted in 2008, serves to address the need for tariff concessions on specific goods under the Customs Act 1901. This legislation was introduced by the Parliament of Australia to facilitate tariff reductions on certain imported goods, thereby potentially lowering costs for businesses and consumers. The instrument pertains specifically to Empire Resources Pacific Ltd's application for tariff concessions on certain aluminium foil, aiming to provide a duty-free rate on these goods if the conditions set out in the Act are met. The policy objective is to ensure that the application of tariff concessions aligns with the broader economic and trade policy goals of the country by promoting competitive markets and facilitating trade.
Scope and Application
The Tariff Concession Instrument No. 0803846 under the Customs Act 1901 applies to the specific goods in respect of which Empire Resources Pacific Ltd made an application for a Tariff Concession Order (TCO). This Act facilitates the process by which the Chief Executive Officer of Customs may grant tariff concessions on certain goods, effectively reducing the customs duty payable on them. The TCO applies to the goods specified in the instrument, which in this case are certain types of aluminium foil, and it is effective from the date the application was lodged, 7 March 2008. The application of the TCO is limited to the goods specified and does not extend to any other goods unless similarly applied for and approved by the CEO. The geographic scope of this TCO is national, applying across all jurisdictions within Australia. There are no stated exclusions or exemptions within this particular TCO, and it does not disadvantage any persons or impose any liabilities on anyone other than the Commonwealth. The application and effect of TCOs can be further extended or specified through subordinate instruments, although this particular TCO stands independently in its scope and application as described.
Key Provisions
The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) through section 269F, which applies lower rates of customs duty to specific goods. Empire Resources Pacific Ltd applied for such an order for certain aluminium foil, which was granted under TCO No. 0803846 on 30 May 2008. This TCO applies to the aluminium foil specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty rate from 5% to free. The decision to grant the TCO was based on the Chief Executive Officer of Customs (CEO) being satisfied that no substitutable goods were produced in Australia, as per section 269C.
The obligations under the Customs Act 1901 include the requirement for the CEO to assess applications for TCOs to ensure they meet the core criteria set out in section 269C. If the CEO determines that no substitutable goods are produced in Australia, they must make a written TCO. Additionally, under section 269K, the CEO must publish a notice in the Gazette inviting public submissions regarding the TCO application. In this instance, no submissions were received. The TCO is effective from the date the application was lodged, 7 March 2008, as stipulated by section 269S(1).
The Act does not impose specific penalties for breaches related to TCOs. However, the CEO’s decision-making process is crucial, and incorrect assessments could potentially lead to legal challenges or disputes over the application of customs duties. The Act ensures that the TCO does not affect the rights of any person adversely in relation to actions taken before the TCO was registered, protecting parties from retrospective liabilities. The rights of importers are specifically enhanced, allowing them to apply for duty refunds on goods imported since the effective date of the TCO, as outlined in paragraph 126(1)(r) of the Regulations.