EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918825
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.
Bundaberg Brewed Drinks Pty Ltd applied for a TCO in respect of certain bottle caps on 03 June 2009.
Instrument
TCO No 0918825 was made on 28 August 2009. It declares that those certain bottle caps 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. 0918825 is taken to have come into force on 03 June 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 by the Australian Parliament to provide for the regulation of customs and excise, among other things. The Act was introduced to address the need for a comprehensive legislative framework governing the importation and exportation of goods, including the imposition and collection of customs duties and taxes. One of its mechanisms, the Tariff Concession Order (TCO) scheme, was established to offer tariff relief on certain goods under specific circumstances, thereby facilitating trade and economic efficiency. The policy objective is to support Australian businesses by reducing the cost of imported goods that have no locally produced alternatives, thus promoting competition and consumer choice. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make TCOs, which provide for a reduced or zero rate of customs duty on goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative framework aims to balance the interests of importers, local producers, and the broader economy by ensuring that tariff relief is granted judiciously.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation and implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods that are eligible for a lower rate of customs duty. Any person may apply to the CEO for a TCO, provided the goods in question do not fall under the category of goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. A TCO is granted if the CEO determines that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the date the application was lodged. This concession does not affect existing rights or impose new liabilities on persons other than the Commonwealth, and it benefits importers by potentially allowing them to apply for duty refunds on goods imported since the TCO's effective date. The scope of the TCO is determined by the CEO's decision and is subject to the terms of the Customs Tariff Act 1995, as evidenced by TCO No. 0918825 which was applied to certain bottle caps.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0918825 (TCO No. 0918825) under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S. These sections collectively provide the framework for applying and approving a Tariff Concession Order (TCO). Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C establishes the core criteria that must be met for a TCO to be granted, which includes the requirement that no substitutable goods were produced in Australia on the day the application was lodged (sections 269B and 269D). If the CEO is satisfied that these criteria are met, they must make a written order (section 269P(3)) that specifies the applicable duty on the goods. Section 269K mandates the publication of a notice in the Gazette inviting submissions from interested parties, while section 269S outlines that the TCO comes into force on the day the application was lodged.
The Act imposes several obligations and requirements on the parties involved in the process of obtaining a TCO. The applicant must ensure that their application is valid and meets the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the date the application was lodged. The CEO has the responsibility to assess the application against these criteria and decide whether to grant the TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as per section 269K(1). Failure to comply with these obligations could potentially result in the TCO not being granted.
In terms of offences, penalties, or consequences for breach, the explanatory statement does not detail specific offences related to the TCO process. However, general provisions within the Customs Act 1901 and associated regulations may apply to breaches of customs laws. Penalties for breaches can include fines and, in severe cases, imprisonment. The maximum penalties for breaches of customs laws can vary widely depending on the nature and severity of the offence. For example, under the Customs Act 1901, penalties for offences related to customs duty evasion can include fines of up to $22,200 for individuals and up to $111,000 for corporations, as well as potential imprisonment terms. The explanatory statement does not specify penalties for the TCO process itself but references the broader legal framework within which any breaches would be assessed and punished.