EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927401
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.
Unilever Australasia applied for a TCO in respect of certain aerosol valves transport system on 28 July 2009.
Instrument
TCO No 0927401 was made on 09 October 2009. It declares that those certain aerosol valves transport system 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. 0927401 is taken to have come into force on 28 July 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 duties in Australia, with Part XVA specifically addressing Tariff Concession Orders (TCOs). This legislative framework was designed to address the need for tariff relief for certain goods, ensuring that Australian businesses have access to competitively priced inputs that are not produced domestically. The Tariff Concession Instrument No. 0927401, introduced in 2009, exemplifies this purpose by granting a tariff concession to Unilever Australasia for certain aerosol valves transport systems. This concession was granted by the Chief Executive Officer of Customs, following an application and subsequent determination that no substitutable goods were produced in Australia. The policy objective, as per section 269C of the Act, is to provide relief where necessary to support Australian industry and consumer interests, subject to the core criteria outlined in the Act. The absence of objections to the concession in the consultation process highlights the alignment of this measure with broader economic objectives.
Scope and Application
The Customs Act 1901, through Part XVA, outlines a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders provide for a reduced rate of customs duty on goods specified in the order. The application for such a concession must meet core criteria, including the condition that no substitutable goods are produced in Australia in the ordinary course of business. The application process involves a determination by the CEO and potentially an invitation for public submissions, although in the case of TCO No. 0927401, no submissions were received. The TCO, once made, applies retroactively to the date of the application and does not affect any existing rights or liabilities incurred before its issuance. The particular TCO No. 0927401, issued on 9 October 2009, pertains to certain aerosol valves transport systems, granting them a free rate of duty as opposed to the general rate of 5%. This concession is specific to the goods mentioned and does not extend to other goods unless explicitly stated in a separate TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0927401 under the Customs Act 1901 (Act) are sections 269C, 269P, and 269S, which pertain to Tariff Concession Orders (TCOs). Section 269C specifies that a TCO application meets core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (269C). Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, a written order (TCO) must be made declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff) (269P(3)). Section 269S stipulates that a TCO comes into force on the day the application for the TCO was lodged (269S). This specific TCO, No. 0927401, declares that certain aerosol valves transport systems are subject to a free rate of duty, as opposed to the general rate of 5% (269S(1)).
The Act imposes specific obligations and requirements on parties involved in the process of applying for and receiving a TCO. An applicant, such as Unilever Australasia in this case, must ensure that the goods in question do not have substitutable counterparts produced in Australia (269C). The CEO is required to assess the application against these criteria and make a decision based on whether the application meets the core criteria (269P(3)). Once a TCO is issued, the CEO must also publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission (269K(1)). This particular TCO was made without any submissions, indicating that no objections were raised against the concession.
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breach of the conditions set forth in this TCO. However, under the general provisions of the Customs Act 1901, any breaches of customs regulations can lead to significant penalties, including fines and imprisonment. The Customs Act provides for various sanctions for non-compliance, which may include fines up to $22,200 for individuals and substantially higher amounts for corporations, as well as potential imprisonment terms depending on the severity of the breach. These penalties underscore the importance of adhering to the terms of the TCO and the broader customs regulations.