EXPLANATORY STATEMENT
Tariff Concession Instrument No.0412880
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.
IWD Strapping Sales Pty Ltd applied for a TCO in respect of certain thermoplastic extrusion lines on 1 December 2004.
Instrument
TCO No 0412880 was made on 11 February 2005. It declares that those certain thermoplastic extrusion 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 No0412880 is taken to have come into force on 1 December 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the importation and exportation of goods, among other things, through the imposition of customs duties. To address specific economic and trade policy objectives, the Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, which provide for reduced rates of customs duty on certain goods. Enacted to support Australian industry by reducing the cost of importing goods essential for production, the TCO scheme ensures that Australian businesses are not unduly burdened by high customs duties on goods that cannot be produced domestically. The policy objective is to foster economic growth and competitiveness by allowing for tariff reductions on goods for which there are no suitable Australian-made alternatives. This is achieved by enabling businesses to apply to the Chief Executive Officer of Customs for a TCO, who will consider the application against specific criteria before deciding whether to issue the concession.
Scope and Application
The Customs Act 1901 applies to the scope and application of Tariff Concession Orders (TCO) for goods imported into Australia. Specifically, the Act allows for the Chief Executive Officer of Customs (CEO) to make a TCO when certain conditions are met, thereby applying a lower rate of customs duty to the goods in question. The Act applies to individuals or entities seeking a TCO for goods not produced in Australia in the ordinary course of business and not specified in section 269SJ as ineligible for a TCO. The geographic reach of the Act is national, applying across the Commonwealth of Australia. The Act does not specify exclusions or exemptions, but it does establish thresholds for the CEO to determine the eligibility of an application based on the absence of substitutable goods produced in Australia. The Act also extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the prescribed items and their respective duty rates. In the case of Tariff Concession Instrument No. 0412880, the CEO determined that thermoplastic extrusion lines met the core criteria for a TCO, reducing the duty rate from the general 5% to 3%.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0412880 under the Customs Act 1901 include section 269C, which provides the core criteria for determining if an application for a Tariff Concession Order (TCO) is valid. Specifically, section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) then mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written TCO. The TCO specifies that the goods in question are subject to a lower rate of customs duty as outlined in the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. The CEO must first determine if the TCO application adheres to the core criteria as defined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the application date, as outlined in section 269D. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be made. Failure to follow these steps could result in non-compliance with the Act.
The Act also delineates specific consequences for breaches. While the explanatory statement does not explicitly detail criminal penalties, it does state that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration in a way that would disadvantage them or impose liabilities. However, it is important to note that the general provisions of the Customs Act 1901 and related regulations may impose penalties for non-compliance, which can include fines and other sanctions. These penalties are not specified in the explanatory statement but would be found in the relevant sections of the Customs Act and associated regulations.