EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918846
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 Asia Pacific applied for a TCO in respect of certain glass bottle moulds on 03 June 2009.
Instrument
TCO No 0918846 was made on 28 August 2009. It declares that those certain glass bottle 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. 0918846 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, enacted by the Parliament of Australia, establishes a framework for customs duties and includes provisions for Tariff Concession Orders (TCOs). These TCOs are designed to provide a lower rate of customs duty on specified goods when certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0918846, enacted in 2010, was introduced to address the need for tariff concessions on specific imported goods by recognising that no suitable Australian-produced alternatives exist. This legislative instrument was made by the Chief Executive Officer of Customs following an application by Oi Asia Pacific for certain glass bottle moulds, resulting in a duty rate reduction from 5% to free. The process involved public consultation, as required by the Act, although no objections were received. The policy objective is to facilitate the importation of goods that are not produced in Australia, thereby potentially reducing costs for importers and supporting the competitive landscape of the relevant industry.
Scope and Application
The Tariff Concession Instrument No. 0918846, under the Customs Act 1901, applies to the specific goods for which a Tariff Concession Order (TCO) has been granted. In this case, the TCO was applied for and granted to Oi Asia Pacific for certain glass bottle moulds. The instrument was made by the Chief Executive Officer of Customs on 28 August 2009, following an application lodged on 3 June 2009, and it applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act facilitates lower rates of customs duty for goods subject to a TCO, and in this instance, the rate of duty on the specified glass bottle moulds is reduced from the general rate of 5% to free. The scope of the Act encompasses all entities or persons involved in the importation of these specified goods, thereby directly affecting importers who can benefit from the reduced duty rate and apply for duty refunds on goods imported since the TCO was deemed to have come into force. The geographic reach of this Act is national, applying across Australia under the Commonwealth jurisdiction, with no regional exclusions specified within the instrument itself.
Key Provisions
The primary sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application meets the core criteria set out in section 269C, and is not in respect of goods specified in section 269SJ, the CEO must make a written order (the TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The CEO must also publish a notice in the Gazette inviting submissions if there are reasons why the TCO should not be made, as required by subsection 269K(1). The TCO is taken to have come into force on the day on which the application was lodged, according to subsection 269S(1).
The obligations imposed on parties by the Act include the requirement for the CEO to assess whether an application for a TCO meets the core criteria. This involves determining whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269C. If the application meets these criteria and is not in respect of goods specified in section 269SJ, the CEO must make the TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made. The Act also provides for the rights of importers, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.
Breaching the requirements set out in the Act can result in both civil and criminal consequences. Although the explanatory statement does not specify maximum penalties for breaches, it is clear that failure to comply with the Act’s provisions, such as not adhering to the criteria for making a TCO or ignoring the notice publication requirement, could lead to legal action. Civil penalties might include fines or other monetary penalties, while criminal penalties could include imprisonment, depending on the severity of the breach and the discretion of the court. The Act provides a framework within which the CEO operates, and non-compliance with this framework can result in significant legal repercussions for the parties involved.