EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1138780
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.
Huhtamaki Oceania Flexibles Ltd applied for a TCO in respect of certain aluminium foil on 21 November 2011.
Instrument
TCO No 1138780 was made on 13 February 2012. It declares that those certain aluminium foil 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. 1138780 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for administering customs duties and provides a mechanism for tariff concessions through Tariff Concession Orders (TCOs). The Act aims to facilitate trade by reducing customs duties on certain goods, provided they meet specific criteria, such as the absence of substitutable goods produced in Australia. The Explanatory Statement for Tariff Concession Instrument No. 1138780, made under the Customs Act 1901, details an application by Huhtamaki Oceania Flexibles Ltd for a TCO on certain aluminium foil. The Chief Executive Officer of Customs granted the concession on 13 February 2012, following a determination that no substitutable goods were produced in Australia, thereby reducing the duty on these goods from 5% to free. The instrument took effect on 21 November 2011, the date the application was lodged, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 1138780 applies to the particular aluminium foil specified in the instrument, granting a tariff concession under the Customs Act 1901. The instrument was made in response to an application by Huhtamaki Oceania Flexibles Ltd, and the concession applies to goods that were not produced in Australia in the ordinary course of business as of the date the application was lodged. The instrument operates by reducing the rate of customs duty from the general rate of 5% to free, thereby providing a tariff concession for the specified aluminium foil. The instrument's scope is limited to the specific goods mentioned, and it does not affect any existing rights or impose new liabilities on any parties other than the Commonwealth. The instrument is effective from the date the application was lodged, 21 November 2011, and any importers of the specified goods since that date can apply for a refund of duty. The instrument does not include any exclusions or exemptions beyond those specified in the Customs Act 1901 and related regulations.
Key Provisions
The Tariff Concession Order No. 1138780, made under section 269F of the Customs Act 1901, specifies that certain aluminium foil qualifies for a concession, meaning that a reduced or free customs duty rate applies. This order, which came into force on 21 November 2011, was made following an application from Huhtamaki Oceania Flexibles Ltd. The specific provision in the Customs Tariff Act 1995 that applies to these goods is item 50 of Schedule 4, which sets the duty rate at free, down from the general rate of 5%. This reduction in duty aims to encourage the importation of these goods and potentially stimulate domestic industry or consumer market benefits.
The Customs Act 1901 imposes several obligations on the Chief Executive Officer of Customs (CEO) when processing a Tariff Concession Order (TCO) application. According to section 269C, the CEO must ensure that the application meets the core criteria, which include verifying that no substitutable goods are produced in Australia on the day the application was lodged. Additionally, under section 269B, the CEO must define and interpret terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. These terms are crucial in determining whether the application is valid and should be granted. Furthermore, the CEO is mandated to publish a notice in the Gazette under subsection 269K(1) inviting submissions from any interested parties who may oppose the TCO, although no submissions were received in this instance.
Failing to comply with the requirements set out in the Customs Act 1901 regarding Tariff Concession Orders may result in legal consequences. Although specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations generally can result in both civil and criminal penalties. Civil penalties may include financial fines, while criminal penalties might involve imprisonment, depending on the severity and intent of the breach. The Act also provides for the potential recovery of lost revenue due to improper concession claims, further emphasising the importance of adherence to the legislative requirements.
Overall, Tariff Concession Order No. 1138780 is designed to provide economic benefits by reducing customs duties on certain aluminium foil, provided that the core criteria are met and no substitutable goods are produced domestically. The Act ensures that the application process is transparent and allows for public consultation, although no objections were raised in this case. Compliance with these provisions is critical, as non-compliance can lead to significant legal and financial repercussions.