EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0809063
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.
Phillip Morris Ltd applied for a TCO in respect of certain stainless steel tobacco bin parts on 21 May 2008.
Instrument
TCO No 0809063 was made on 18 August 2008. It declares that those certain stainless steel tobacco bin parts 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. 0809063 is taken to have come into force on 21 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 Customs Act 1901, enacted by the Australian Parliament, provides the legislative framework for customs duties and related matters. The Act allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs, offering reduced rates of customs duty on specified goods. This mechanism was introduced to address the need for flexibility in customs duties, ensuring that certain goods can benefit from tariff reductions where appropriate. In this context, the Tariff Concession Instrument No. 0809063 was created to address a specific application by Phillip Morris Ltd for concessional tariff treatment on certain stainless steel tobacco bin parts. The objective of this instrument is to ensure that such goods are treated favourably in accordance with the criteria set out in the Customs Act, thereby facilitating trade and potentially reducing costs for importers.
Scope and Application
The Tariff Concession Instrument No. 0809063, issued under the Customs Act 1901, applies to the specific stainless steel tobacco bin parts that Phillip Morris Ltd sought concessions for. The Act facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on particular goods. This particular TCO applies only to the stainless steel tobacco bin parts specified in the order, which are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument ensures that the concession applies from the date the application was lodged, in this case, 21 May 2008, and benefits importers by allowing them to seek refunds on duties paid before the concession was effective. The Act does not disadvantage any person other than the Commonwealth and does not impose new liabilities on anyone, as it only modifies the duty rates for the specified goods. This legislation is part of a broader scheme that allows for the review and potential modification of customs duties through subordinate instruments, enabling flexibility in trade policy.
Key Provisions
The Customs Act 1901, under its Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows an individual to apply to the CEO for a TCO concerning specific goods. If the CEO determines that the application is valid, as per section 269SJ, which excludes certain goods from TCO eligibility, the application must then meet the core criteria outlined in section 269C. This section stipulates that a TCO application meets the core criteria if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
Upon confirming that the TCO application satisfies the core criteria, the CEO is mandated under section 269P(3) of the Act to issue a written TCO. This order declares that the specified goods are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995. For example, TCO No. 0809063, issued on 18 August 2008, pertains to certain stainless steel tobacco bin parts, applying item 50 of Schedule 4 with a duty rate of free, as the CEO was convinced that no substitutable goods were produced domestically. This TCO came into force on 21 May 2008, the date the application was lodged, as per subsection 269S(1) of the Act.
The Act imposes several obligations on the CEO, including the duty to publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO, as stipulated in subsection 269K(1). In this particular case, no such submissions were received. Furthermore, the TCO does not retroactively affect the rights of any individual, except the Commonwealth, ensuring that no pre-existing rights are adversely impacted or liabilities imposed on anyone other than the Commonwealth, as per the Act.
Should there be a breach of the provisions outlined in the Customs Act 1901, various penalties and consequences could apply. However, the explanatory statement does not detail specific penalties or consequences for non-compliance with the TCO provisions. Typically, such breaches could lead to civil or criminal penalties, depending on the severity and nature of the violation, though the exact penalties are not specified in the text.