EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0412267
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.
Composite Materials Engineering Pty Ltd applied for a TCO in respect of certain plastic hydraulic presses on 15 November 2004.
Instrument
TCO No 0412267 was made on 1 February 2005. It declares that those certain plastic hydraulic presses 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. 0412267 is taken to have come into force on 15 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. 0412267, enacted in 2005, pertains to the Customs Act 1901. This legislation addresses the gap in tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) for goods that meet certain criteria, thereby reducing the rate of customs duty. The objective of the instrument, as stated in the explanatory statement, is to provide tariff concessions for goods that are not produced in Australia and for which no substitutable goods are available domestically. The policy objective is to facilitate the importation of these goods by reducing their customs duty, thus benefiting importers and potentially lowering the cost of these goods in the Australian market. The Tariff Concession Instrument was issued following an application by Composite Materials Engineering Pty Ltd for certain plastic hydraulic presses, which qualified for a lower rate of duty under the specified conditions of the Customs Act 1901.
Scope and Application
The Customs Act 1901, through its Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These TCOs apply to specific goods for which an application has been made and approved, where it is determined that no substitutable goods are produced in Australia. The Act applies to any individual or entity seeking a concession on the customs duty for imported goods. Its jurisdictional reach is national, as it is an Act of the Commonwealth of Australia, though it affects customs practices across state and territory borders due to the national scope of customs regulation. Section 269SJ of the Act excludes certain goods from being subject to a TCO, such as those specified therein. The Act allows for the application of TCOs to be extended or restricted through subordinate instruments, such as regulations, which provide further detail on the administration and enforcement of the concessions. The Tariff Concession Instrument No. 0412267, as an example, was made to provide a lower rate of customs duty on certain plastic hydraulic presses, reducing the duty from 5% to 3% under the applicable schedule of the Customs Tariff Act 1995.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0412267 pertain to the making of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. This instrument declares that certain plastic hydraulic presses are subject to a reduced customs duty rate of 3%, as opposed to the general rate of 5%. This concession is contingent upon the Chief Executive Officer of Customs (CEO) determining that no substitutable goods are produced in Australia, as outlined in sections 269C and 269P(3). The CEO must also ensure that the application does not involve goods that are specified in section 269SJ, which are ineligible for a TCO. Once the core criteria are met, the CEO is mandated to make a written TCO order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
Under this Act, the CEO has specific obligations and requirements when processing a TCO application. Firstly, the CEO must promptly publish a notice in the Gazette, inviting any interested parties to submit their views on why the TCO should not be granted, as stipulated in subsection 269K(1). In the case of TCO No. 0412267, no submissions were received. Secondly, the CEO must evaluate whether the application meets the core criteria, particularly ensuring that no substitutable goods are being produced in Australia. If these criteria are satisfied, the CEO must issue a written TCO order, as mandated by section 269P(3). Furthermore, the TCO is deemed to have come into force on the day the application was lodged, according to subsection 269S(1).
There are specific consequences outlined in the Act for breaches of the TCO provisions. Although the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 in general could result in civil or criminal penalties, depending on the nature and severity of the breach. For instance, knowingly making a false statement in an application could lead to fines or imprisonment, as provided under section 257 of the Customs Act 1901. The maximum penalties for such offences can vary, with serious breaches potentially incurring substantial fines or lengthy imprisonment terms. Additionally, failure to comply with the terms of the TCO could lead to financial liabilities or other legal repercussions for the party in breach.