EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138448
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.
Bulk Handling Australia Pty ltd applied for a TCO in respect of certain packaging containers on 17 November 2011.
Instrument
TCO No 1138448 was made on 13 February 2012. It declares that those certain packaging containers 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. 1138448 is taken to have come into force on 17 November 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 Commonwealth Parliament, provides for the regulation of customs and excise duties in Australia. The Act establishes a framework for the administration of customs duties, including the ability to make Tariff Concession Orders (TCOs) that allow for lower rates of duty on certain goods. The Customs Act 1901 was introduced to address the need for a streamlined and efficient process for modifying customs duty rates on specific goods, thereby promoting trade and economic efficiency. The Tariff Concession Instrument No. 1138448, made in 2012, is one such instrument under the Customs Act 1901. It was introduced in response to an application from Bulk Handling Australia Pty Ltd for tariff concessions on certain packaging containers, with the objective of ensuring that the application of duty does not disadvantage Australian producers of substitutable goods.
Scope and Application
The Tariff Concession Instrument No. 1138448, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain packaging containers, and is intended to provide a tariff concession to the applicant, Bulk Handling Australia Pty Ltd, by reducing the customs duty rate from 5% to free. The instrument is effective from the date the application was lodged, 17 November 2011. This legislation is applicable to the goods specified within the instrument and to the entities involved in the import or production of these goods, primarily benefiting importers who can apply for duty refunds on goods imported since the commencement date. The instrument is part of a Commonwealth scheme, and its application is limited to the specific goods outlined, with no impact on other goods or entities not specified. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities. The scope of the instrument is further defined and potentially extended through subordinate instruments as necessary.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269E, 269P(3), 269K(1), and 269S(1) of the Customs Act 1901, which outline the process for applying for and making a Tariff Concession Order (TCO). Section 269C defines the core criteria for TCO applications, stipulating that an application is valid if no substitutable goods are produced in Australia at the time of application. This is further defined by sections 269B and 269E, which specify the meanings of 'goods produced in Australia' and 'ordinary course of business', respectively. Once the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, section 269P(3) requires the CEO to make a written TCO order. Section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. Finally, section 269S(1) stipulates that the TCO is effective from the date the application was lodged.
Under this Act, the CEO is required to review TCO applications to determine if they meet the core criteria outlined in section 269C. If the CEO determines that no substitutable goods are produced in Australia, they must issue a TCO as specified in section 269P(3). The CEO must also publish a notice in the Gazette (section 269K(1)), inviting any interested parties to submit their views on whether the TCO should proceed. The CEO must consider these submissions before making a final decision. The TCO will not affect any pre-existing rights of parties other than the Commonwealth and will not impose any liabilities on anyone in respect of actions taken before the TCO's registration.
Failure to comply with the provisions of this Act may result in civil or criminal penalties. The specific penalties are not detailed in the explanatory statement, but they could include fines or imprisonment, depending on the nature and severity of the breach. The Act mandates that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date. Importers may benefit from the TCO by applying for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.
The explanatory statement mentions that Bulk Handling Australia Pty Ltd applied for a TCO regarding certain packaging containers on 17 November 2011. The CEO was satisfied that no substitutable goods were produced in Australia and issued TCO No. 1138448 on 13 February 2012, effective from the application date. This TCO declares that the specified packaging containers are subject to a lower rate of duty, specifically free instead of the general rate of 5%, as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO did not receive any submissions opposing the TCO, which means it came into force without any objections.