EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1131717
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.
Visypak Operations applied for a TCO in respect of certain beer bottle dispensers on 16 September 2011.
Instrument
TCO No 1131717 was made on 05 December 2011. It declares that those certain beer bottle dispensers 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. 1131717 is taken to have come into force on 16 September 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, enacted by the Parliament of Australia, introduced a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to provide tariff concessions on certain goods. The Act aims to ensure that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in section 269C. Visypak Operations applied for a TCO for specific beer bottle dispensers on 16 September 2011. Following the CEO’s satisfaction that the core criteria were met, TCO No. 1131717 was issued on 5 December 2011, declaring that these dispensers are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free, down from the general rate of 5%. The TCO came into effect on the date of application, 16 September 2011, and does not disadvantage any person or impose liabilities on anyone except the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which an application is made and approved, leading to a reduced rate of customs duty. The Act applies to individuals or entities seeking to import goods eligible for tariff concessions, provided that the goods do not fall under the prohibited categories specified in section 269SJ. The eligibility for a TCO hinges on the absence of substitutable goods produced in Australia in the ordinary course of business as of the application date, with definitions provided for key terms such as "substitutable goods" and "ordinary course of business" in sections 269D and 269E respectively. The geographic reach of the Act is national, affecting all entities involved in the importation of goods across Australia. The Act allows for the extension or restriction of its application through subordinate instruments, though this specific explanatory statement does not elaborate on such provisions. The application of TCO No. 1131717, effective from 16 September 2011, illustrates the process, with Visypak Operations successfully applying for a concession on certain beer bottle dispensers, resulting in a duty rate of free as opposed to the general rate of 5%.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), include sections 269F, 269C, and 269P. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specified goods. If the application is not in respect of goods that cannot be subject to a TCO (as outlined in section 269SJ), the CEO must determine if the application meets the core criteria set out in section 269C. This criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO must make a written order under section 269P(3) declaring that the goods in question are subject to a prescribed tariff concession.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. Firstly, the CEO is required to ensure that any TCO application is not in respect of goods listed in section 269SJ. The CEO must also verify that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to submit their views. If no submissions are received, the CEO proceeds to make the TCO. Furthermore, the Act requires that the rights of any person (other than the Commonwealth) are not adversely affected by the TCO, ensuring that no new liabilities are imposed on anyone as a result of the TCO.
In terms of offences, penalties, and consequences, the Customs Act 1901 does not explicitly detail specific offences related to TCOs. However, any breach of the Act's provisions or failure to comply with the requirements could potentially lead to legal actions. The penalties for non-compliance with customs regulations generally can include fines and imprisonment. For example, under section 250 of the Customs Act 1901, an individual found guilty of a customs offence may be liable for a penalty of up to 10,000 penalty units or imprisonment for up to 10 years, or both. For corporations, the penalties can be significantly higher, with fines reaching up to 50,000 penalty units under section 251. These penalties underscore the importance of adhering to the Act's provisions and the potential serious consequences for non-compliance.