EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907333
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.
Oi Australia applied for a TCO in respect of certain glass bottles moulds on 03 March 2009.
Instrument
TCO No 0907333 was made on 29 May 2009. It declares that those certain glass bottles moulds 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. 0907333 is taken to have come into force on 03 March 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 was enacted to provide a framework for the regulation of customs and excise, including the administration of tariffs and duties on imported goods. A significant component of this Act is the scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This scheme was introduced to address the need for specific tariff reductions on certain imported goods, particularly where no suitable Australian-made alternatives exist. By allowing the CEO to apply lower rates of customs duty to goods that are the subject of a TCO, the Act aims to support economic efficiency and competitiveness within the Australian market. The policy objective is to ensure that Australian businesses can access necessary imported goods at a reduced cost, thereby promoting trade and industry growth without disadvantaging the Commonwealth or imposing new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce the customs duty on certain goods. The Act applies to any person who may apply for a TCO for goods not specified under section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application must meet the core criteria outlined in section 269C of the Act, particularly that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act is national, affecting the entire Commonwealth of Australia, as it concerns the regulation of customs duties which have a nationwide impact. The TCO, once made, applies to the specific goods declared in the order and affects the rights of importers, allowing them to apply for refunds of duty on those goods imported since the effective date of the TCO. The TCO does not impose any new liabilities on individuals or entities and does not disadvantage any person other than the Commonwealth. The Act allows for the application to be extended or restricted through subordinate instruments, which may provide further detail on the specific conditions or criteria for particular types of goods.
Key Provisions
The main operative sections of this legislation include section 269F (application for Tariff Concession Order), section 269C (core criteria for TCOs), and section 269P (making a TCO) of the Customs Act 1901. 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, provided the goods are not specified in section 269SJ. 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. Section 269P mandates that if the CEO is satisfied that a TCO application meets the core criteria, the CEO must make a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The Customs Act 1901 imposes several obligations on the CEO in relation to TCO applications. Firstly, the CEO must decide whether an application meets the core criteria as per section 269C, which involves ensuring that no substitutable goods were produced in Australia on the day the application was lodged. Secondly, if the application meets the criteria, the CEO must make a written TCO as per section 269P. Additionally, under section 269K, the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made. In this case, the CEO did not receive any submissions.
The Customs Act 1901 also provides for penalties and consequences for non-compliance with the provisions of a TCO. While specific penalties are not detailed in the explanatory statement, breaches of the Customs Act 1901 generally attract civil and criminal penalties, which can include fines and imprisonment, depending on the nature and severity of the breach. For instance, section 268 of the Act outlines that a person who contravenes any provision of the Act or the regulations is liable to a penalty of up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate. In the context of TCOs, failure to comply with the terms of a TCO could result in the loss of tariff concessions and potential financial penalties for the importer.