EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843171
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.
Avery Denison Materials applied for a TCO in respect of certain thermal film on 09 December 2008.
Instrument
TCO No 0843171 was made on 06 March 2009. It declares that those certain thermal film 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. 0843171 is taken to have come into force on 09 December 2009.
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 application process for Tariff Concession Orders (TCOs) through Part XVA, aiming to provide relief on customs duty for specified goods. This legislation was designed to address the gap in providing tariff concessions for goods that are not produced in Australia and do not have substitutable alternatives domestically. The explanatory statement for Tariff Concession Instrument No. 0843171, made in 2009, exemplifies this process where Avery Denison Materials successfully applied for a TCO for certain thermal film, resulting in the application of a free rate of duty instead of the general 5%. The instrument was published in the Gazette with no objections received, and it came into effect from the date of the application, providing a benefit to importers by potentially allowing them to apply for duty refunds for goods imported since the concession took effect, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for reduced customs duty rates on specified goods. This process applies to entities and individuals who seek to import goods that are not already produced in Australia and for which no suitable substitutes are available domestically. The Act's application is limited to the specific goods that meet the criteria for a TCO and does not extend to those goods listed in section 269SJ of the Act, which explicitly exclude certain items from TCO eligibility. The geographic reach of the Act is national, as it operates within the framework of Australian customs law, but its effects are felt internationally through the regulation of imported goods. The TCO mechanism ensures that no existing rights or liabilities of non-Commonwealth persons are adversely affected by the order, which only benefits importers by potentially allowing them to apply for duty refunds on goods imported since the TCO's effective date. The Act may be further detailed or modified through subordinate instruments, although no such modifications are indicated in the provided text.
Key Provisions
The primary operative sections of this legislation, specifically Instrument TCO No. 0843171, establish the process and criteria for making a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not involve goods specified in section 269SJ, which cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. If the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269P(3), they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For Avery Denison Materials, this means their certain thermal films are subject to item 50 of the Tariff, resulting in a duty rate of free instead of the general 5%.
The obligations imposed by the Act on the parties governed by it are primarily on the CEO. The CEO must accept a valid TCO application and, as per section 269K(1), publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this case, the CEO did not receive any submissions, thus proceeding with the TCO. Additionally, the CEO must ensure that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person, as per section 269S(1).
In terms of offences, penalties, or consequences, the Act does not explicitly detail specific penalties for breach of the TCO provisions. However, any failure by the CEO to follow the stipulated process or criteria could potentially lead to legal challenges or administrative actions. The legislation ensures that the rights of importers are beneficially affected, and under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the TCO came into force. It is important to note that the TCO does not impose any liabilities on any person, thus ensuring that no one is disadvantaged by its implementation.