EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411310
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.
Visy Paper Pty Ltd applied for a TCO in respect of certain waste glass separating and sorting lines on 1 November 2004.
Instrument
TCO No 0411310 was made on 7 January 2005. It declares that those certain waste glass separating and sorting lines 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 3%.
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. 0411310 is taken to have come into force on 1 November 2004.
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. 0411310, enacted under the Customs Act 1901, was introduced to address the need for a streamlined process for granting tariff concessions on specific goods. This instrument, made by the Chief Executive Officer of Customs on 7 January 2005, applies to certain waste glass separating and sorting lines, reducing the duty from the general rate of 5% to 3%. This was in response to an application by Visy Paper Pty Ltd on 1 November 2004, where it was determined that no substitutable goods were being produced in Australia. The instrument aims to provide relief to importers by allowing them to claim a refund of the difference in duty paid on imports since the effective date of the tariff concession, which is taken to be the date of application, 1 November 2004. This measure was introduced to ensure that Australian businesses have access to competitively priced goods while also providing a mechanism for tariff concessions that is both efficient and transparent.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to any person or entity that seeks to apply for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The scope of the Act encompasses the entire Commonwealth of Australia, with the CEO's authority to grant concessions on a case-by-case basis, contingent upon satisfying the core criteria outlined in sections 269C, 269D, and 269E of the Act. This includes verifying that no substitutable goods are produced in Australia and ensuring the application aligns with the prescribed definitions. The Act's application extends to any goods that meet the criteria and for which a TCO has been applied, thereby reducing the applicable customs duty rate as specified in the Customs Tariff Act 1995. The Act does not impose any liabilities on persons other than the Commonwealth, and the rights of importers are positively affected as they can apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) through section 269F. This section allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which includes those goods that are ineligible for a TCO, the CEO must evaluate whether the application meets the core criteria set out in section 269C. This criterion requires that, on the day the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations under the Act for applicants and the CEO are clearly defined. An applicant must ensure that the goods in question do not have substitutable alternatives produced in Australia. The CEO, on receiving an application, must verify this and, if satisfied, proceed to issue a TCO. This process also involves publishing a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit reasons why the TCO should not be granted. In the case of TCO No. 0411310, the CEO received no such submissions, facilitating the progression to the TCO's issuance.
The Act imposes specific penalties and consequences for non-compliance. Any breach of the conditions or requirements set out in a TCO could result in civil or criminal liabilities. For instance, if an entity fails to comply with the terms of a TCO, they could face fines or other penalties as prescribed by the Customs Act 1901 and related regulations. The maximum penalties could vary based on the severity of the breach and are subject to the discretion of the relevant authorities. This ensures that the TCOs are adhered to and that the intended tariff concessions are correctly applied and enforced.