EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831475
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.
Tooheys Pty Ltd applied for a TCO in respect of certain rinsing filling capping line on 17 September 2008.
Instrument
TCO No 0831475 was made on 05 December 2008. It declares that those certain rinsing/filling/capping line 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. 0831475 is taken to have come into force on 17 September 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, facilitates the granting of tariff concessions to importers through Tariff Concession Orders (TCOs) to ensure that Australian consumers and businesses have access to competitively priced goods. The Customs Act 1901 establishes a framework whereby the Chief Executive Officer of Customs (CEO) can make TCOs that provide for a lower rate of customs duty on specified goods if certain criteria are met. This mechanism was introduced to address the gap in providing tariff relief and ensuring fair market practices by allowing imports of goods that are not produced domestically, thereby fostering competition and consumer choice. The Tariff Concession Instrument No. 0831475, made in 2008, is an example of this legislative framework in action, as it grants a tariff concession to Tooheys Pty Ltd for specific rinsing/filling/capping line equipment, reducing the duty rate from the general 5% to free, effective from the date of the application, 17 September 2008.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0831475, applies to entities and individuals who import goods eligible for tariff concessions, particularly focusing on specific rinsing/filling/capping lines. The instrument provides a mechanism through which importers can apply to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) to benefit from reduced customs duty rates on goods not produced in Australia in the ordinary course of business. The scope of the Act extends to all imports of goods that meet the criteria outlined in the Act, ensuring that the reduced duty rate applies only to those goods specified in the TCO. Notably, the Act does not apply to goods listed in section 269SJ of the Customs Act, which excludes certain types of goods from tariff concessions. The instrument's jurisdictional reach is national, as it is administered under the Commonwealth of Australia. The TCO does not affect any pre-existing rights or impose any liabilities on individuals or entities other than the Commonwealth, thereby ensuring that it operates within the confines of established legal frameworks without creating new burdens or disadvantages.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0831475, under the Customs Act 1901, include section 269C, which specifies the core criteria that must be met for a Tariff Concession Order (TCO) to be issued. This involves ensuring that, on the day the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business (sections 269D and 269E). If these conditions are satisfied, the Chief Executive Officer of Customs (CEO) is required to make a TCO, as stated in section 269P(3). This instrument specifically applies to a certain rinsing/filling/capping line, reducing the duty rate from 5% to free, as declared in item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO was issued on 5 December 2008, following an application by Tooheys Pty Ltd on 17 September 2008.
The obligations imposed by the Act on parties or entities governed by it include the requirement for the CEO to ensure that no substitutable goods are being produced in Australia at the time of the TCO application. This is to confirm that the concession does not negatively impact local production. Furthermore, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be granted. In this instance, no submissions were received. The TCO also entails the CEO making a written order that specifies the application of a prescribed item from Schedule 4 of the Customs Tariff Act 1995 to the goods in question.
In terms of penalties and consequences, the Customs Act 1901 does not specify explicit offences or penalties related to the breach of a TCO. However, the act of misrepresenting information in an application to the CEO for a TCO could potentially lead to legal consequences under other sections of the Customs Act or related legislation. The TCO itself does not impose any liabilities on any person, including importers, and it does not affect any rights or liabilities incurred before its effective date. Importers of the goods subject to the TCO may apply for a refund of duty paid on those goods since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.