EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0815983
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.
Dfc Packaging Pty Ltd applied for a TCO in respect of certain aluminium food containers on 04 July 2008.
Instrument
TCO No 0815983 was made on 19 September 2008. It declares that those certain aluminium food 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. 0815983 is taken to have come into force on 04 July 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 framework for the administration of customs and excise duties in Australia. To address the need for a streamlined process in granting tariff concessions on imported goods, Part XVA of the Act was introduced to enable the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs). This legislative mechanism ensures that a lower rate of customs duty applies to specified goods, provided no substitutable goods are produced in Australia in the ordinary course of business. The policy objective behind this provision is to support Australian businesses and consumers by potentially reducing the cost of imported goods, while also ensuring that such concessions do not disadvantage existing local producers. The Tariff Concession Instrument No. 0815983, enacted in 2008, exemplifies this process by granting a tariff concession on certain aluminium food containers, reflecting the Act’s intent to balance economic benefits with fair competition.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods into Australia that may qualify for a TCO. Such concessions can lead to a reduced or free rate of customs duty on specified goods, provided that these goods are not substitutable by products manufactured within Australia and meet certain criteria. The geographic scope of this legislation is national, as it pertains to all imports into Australia and the associated customs duties. The Act does not apply to goods listed in section 269SJ, which are specifically excluded from TCO eligibility. The application and scope of the Act can be further defined or modified through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty and the items to which they apply. For instance, Tariff Concession Order No. 0815983, made in respect of certain aluminium food containers, sets these goods to a duty-free status based on the criteria set out in the Customs Act.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in Tariff Concession Instrument No. 0815983, include sections 269C (269C), 269F (269F), and 269P (269P). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application meets the core criteria, set out in section 269C, they must make a written order (a TCO) specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (269P(3)). Section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. In this case, the CEO was satisfied that no substitutable goods were produced in Australia in relation to the certain aluminium food containers, and thus made a TCO.
The obligations and requirements imposed by the Act on the parties it governs include the submission of a TCO application by a person (269F). Upon accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (269K(1)). In this instance, the CEO did not receive any submissions in response to this invitation. The TCO is taken to have come into force on the day on which the application for the TCO was lodged (269S(1)). Additionally, 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 (269S(2)).
Any offences, penalties, or civil/criminal consequences for breach under this Act are not explicitly stated in the explanatory statement. However, the Act does provide for penalties in other sections. For example, section 236 of the Customs Act 1901 imposes a penalty of up to 10 penalty points (in addition to any other penalty provided by law) for each offence involving the contravention of a provision of the Customs Act or the Customs Regulations 1993. Section 241 of the Act imposes a penalty of up to 50 penalty points (in addition to any other penalty provided by law) for each offence involving the contravention of a provision of the Customs Act or the Customs Regulations 1993 that relates to the importation or exportation of goods. It is important to note that the maximum penalties mentioned are subject to change based on amendments to the Act or the Regulations.