EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111666
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.
Frost Promotions applied for a TCO in respect of certain drink bottles on 06 April 2011.
Instrument
TCO No 1111666 was made on 27 June 2011. It declares that those certain drink bottles 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. 1111666 is taken to have come into force on 06 April 2011.
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 comprehensive framework for the regulation of customs duties in Australia, and it includes provisions for Tariff Concession Orders (TCOs) under Part XVA. The problem or gap that this particular legislation addresses is the need for a mechanism to grant concessions on customs duties for specific goods, provided certain criteria are met. This allows for the reduction of customs duty rates on particular goods, subject to the condition that no substitutable goods are produced in Australia. The instrument in question, Tariff Concession Instrument No. 1111666, was introduced to provide a tariff concession for certain drink bottles, reducing the general duty rate of 5% to free duty. The instrument was enacted by the Chief Executive Officer of Customs, following an application from Frost Promotions and after determining that the application met the core criteria specified in the Customs Act 1901. The policy objective is to facilitate trade by reducing the duty on specific goods, thus benefiting importers and encouraging the import of these goods.
Scope and Application
The Tariff Concession Instrument No. 1111666 under the Customs Act 1901 applies specifically to goods for which a Tariff Concession Order (TCO) has been requested and granted by the Chief Executive Officer of Customs (CEO). The instrument pertains to certain drink bottles for which Frost Promotions applied and subsequently received a concession, resulting in the elimination of customs duty for these goods. This legislative action applies to the goods specified in the TCO, which in this case are drink bottles, and it operates within the national jurisdiction of Australia. The scope of the Act is limited to ensuring that no substitutable goods are produced in Australia at the time of the application, as outlined in section 269C of the Customs Act 1901. The instrument does not impose any disadvantages or liabilities on individuals or entities other than the Commonwealth, and it only benefits the rights of importers by allowing them to apply for a refund of duty paid on these goods since the effective date of the TCO, which is the date the application was lodged.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs) which can be applied for by individuals or entities in respect of certain goods. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO if the goods are not specified in section 269SJ, which lists goods that are ineligible for a concession. The CEO must assess whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively.
Upon determining that the application satisfies these criteria, the CEO is mandated to issue a written TCO under section 269P(3). This order specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question, effectively reducing their customs duty rate. For instance, TCO No. 1111666 pertains to certain drink bottles, which are now subject to a duty rate of free instead of the general rate of 5%. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO within a specified timeframe, as per subsection 269K(1).
The obligations imposed on the CEO include thorough assessment of the TCO applications to ensure they meet the statutory criteria and the publication of notices to allow for public consultation. Importers and other stakeholders must ensure their applications are complete and supported by necessary evidence to substantiate the absence of substitutable goods produced in Australia. Failure to meet these obligations could lead to the application being denied, and thus, the applicant would not benefit from the tariff concession.
Section 269S(1) of the Act stipulates that a TCO comes into effect on the date the application is lodged. This means that the rights of importers can be beneficially affected immediately, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. However, the TCO does not impose any liabilities on any person in respect of actions taken before the registration date. Any breach of the conditions set by the TCO could potentially lead to civil or criminal penalties, although specific penalties are not detailed in the provided text.