EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138715
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.
Guala Enclosures Pty Ltd applied for a TCO in respect of certain bottle cap liners on 21 November 2011.
Instrument
TCO No 1138715 was made on 13 February 2012. It declares that those certain bottle cap liners 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. 1138715 is taken to have come into force on 21 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 Tariff Concession Instrument No. 1138715 was enacted in 2012 under the Customs Act 1901 to address the need for tariff concessions on certain goods, specifically bottle cap liners in this instance. The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) which allow for reduced rates of customs duty on specified goods, provided certain criteria are met. The primary objective of this legislation, as outlined in the explanatory statement, is to facilitate tariff concessions for goods that are not produced in Australia and for which no suitable substitute is available domestically. This process is overseen by the Chief Executive Officer of Customs, who assesses applications to ensure they comply with the statutory criteria before issuing a TCO. In this particular case, Guala Enclosures Pty Ltd successfully applied for a tariff concession on certain bottle cap liners, resulting in a reduction of duty from the general rate of 5% to free duty. This legislative measure ensures that importers can benefit from reduced duties on these specific goods, thereby enhancing trade efficiency and potentially lowering costs for businesses involved in the importation of these items.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce customs duty rates on certain goods. This applies to any person or entity that seeks to import goods eligible for a TCO. The Act’s scope extends to any goods not specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The application of a TCO hinges on 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 day the application was lodged. The Act’s geographic reach is national, applying across Australia. The TCO mechanism allows for further regulation through subordinate instruments, which may provide additional definitions or conditions for specific industries or types of goods. However, the explanatory statement indicates that no submissions were received in response to the publication of the TCO application, implying minimal consultation was required beyond the statutory obligations.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1138715, under the Customs Act 1901, primarily involve the establishment of Tariff Concession Orders (TCOs) as detailed in section 269F (2). Section 269C stipulates that an application for a TCO is eligible if it meets the core criteria, which are defined by section 269B and section 269D. These sections detail the conditions under which goods may be considered for a TCO, particularly focusing on whether substitutable goods are produced in Australia, as outlined in section 269E. The instrument, TCO No. 1138715, specifies that certain bottle cap liners qualify for a tariff concession because no substitutable goods were produced in Australia at the time of the application. The tariff for these goods is reduced to free, as per item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The Chief Executive Officer (CEO) of Customs, as per section 269K(1), is required to publish a notice in the Gazette when a TCO application is deemed valid. This notice invites any interested parties to submit objections if they believe the TCO should not proceed. The CEO must then consider these submissions before making a decision. Additionally, section 269S(1) mandates that the TCO comes into force on the day the application is lodged, ensuring that the rights of importers are protected as per the Regulations.
Breaching the provisions of the Customs Act 1901 or the associated regulations can lead to serious consequences. Offences under the Act may result in civil or criminal penalties. For instance, section 269J specifies penalties for non-compliance, which can include fines or imprisonment, depending on the severity of the breach. The exact penalties are not detailed in the explanatory statement, but they are significant enough to ensure adherence to the tariff concession rules.
In summary, Tariff Concession Instrument No. 1138715 provides a clear framework for reducing customs duty on specific goods, ensuring transparency and fairness in the application process. The obligations on the CEO and other parties are designed to maintain the integrity of the tariff concession scheme, while the potential penalties for non-compliance underscore the importance of adhering to the established rules.