EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806491
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.
Moffat Pty Ltd applied for a TCO in respect of certain food holding containers on 05 May 2008.
Instrument
TCO No 0806491 was made on 18 July 2008. It declares that those certain food holding containers 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. 0806491 is taken to have come into force on 05 May 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. 0806491, enacted under the Customs Act 1901, was introduced to address the issue of tariff concessions for certain goods, specifically food holding containers in this case. The Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that provide lower rates of customs duty for goods that meet specific criteria. The primary objective of this instrument is to ensure that such concessions do not disadvantage any person by retroactively affecting their rights or imposing liabilities for actions taken before the registration date of the TCO. This measure was taken to provide clarity and fairness in the application of customs duties while encouraging trade and production within Australia.
The instrument was developed in response to an application by Moffat Pty Ltd, which sought tariff concessions for certain food holding containers. After assessing the application, the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria under section 269C of the Act. Consequently, TCO No. 0806491 was issued on 18 July 2008, declaring that the specified goods are subject to a 5% duty rate, down from the general rate. This concession became effective from 5 May 2008, the date the application was lodged, and allows importers to apply for a refund of duty on goods imported since that date.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) which can lower the customs duty on certain goods. The Act applies to any person or entity that applies for a TCO in relation to goods, and it is the Chief Executive Officer of Customs who is responsible for determining whether to grant such an order. The scope of the Act is limited to goods that are not specified in section 269SJ of the Act, which includes goods that cannot be subject to a TCO. For a TCO to be considered, the applicant must satisfy the core criteria outlined in the Act, namely that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The geographic reach of this legislation is national, as it pertains to the Australian customs system and the import duties levied on goods entering the country. Any exclusions or exemptions from the application of a TCO are defined within the Act, and the CEO’s decision to make a TCO is final and binding. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect the rights or impose liabilities on any person except the Commonwealth.
Key Provisions
The Customs Act 1901, as outlined in the explanatory statement for Tariff Concession Instrument No. 0806491, primarily concerns the process and criteria for granting Tariff Concession Orders (TCOs) through section 269F (2). When a TCO is issued, it applies a lower rate of customs duty to specified goods, provided the application meets certain criteria. The core criteria, as set out in section 269C, require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. "Substitutable goods," as defined in section 269D, refer to goods that are produced in Australia and can be put to a similar use as the goods subject to the TCO application.
The Act imposes several obligations on the parties involved. Firstly, applicants for a TCO must ensure that their application is not in respect of goods specified in section 269SJ, which cannot be subject to a TCO. The Chief Executive Officer of Customs (CEO) has the responsibility to assess whether the application meets the core criteria, including the verification that no substitutable goods were produced in Australia (section 269C). Upon finding that the application meets these criteria, the CEO is required to make a written TCO order (section 269P(3)). Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who might have reasons to oppose the TCO to lodge a submission (subsection 269K(1)).
Breach of the provisions under the Customs Act 1901 may lead to various civil and criminal consequences. Although the explanatory statement does not explicitly list offences or penalties, it is understood that failing to comply with the Act's requirements could result in legal action. This might include penalties for incorrect claims or fraudulent activities related to the concession orders. The exact penalties would depend on the nature and severity of the breach, and could potentially include fines and other sanctions as prescribed by relevant laws.