EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502230
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.
Pipemakers (Div of Metroll Qld Pty Ltd) applied for a TCO in respect of certain plastic pipe extrusion line on 18 February 2005.
Instrument
TCO No 0502230 was made on 6 May 2005. It declares that those certain plastic pipe 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 No. 0502230 is taken to have come into force on 18 February 2005.
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 Australian Parliament, provides a framework for the administration of customs and excise duties, and among other things, enables the creation of Tariff Concession Orders (TCOs). These orders, created under Part XVA of the Act, allow for reduced customs duty rates on specified goods. The Tariff Concession Instrument No.0502230, enacted on 6 May 2005, addresses the specific need for reduced duty rates on certain plastic pipe extrusion lines, which was sought by Pipemakers (Div of Metroll Qld Pty Ltd). This instrument was created after the Chief Executive Officer of Customs was satisfied that no substitutable goods were being produced in Australia, meeting the core criteria under the Act. The primary policy objective of this concession is to encourage the import of goods that are not domestically produced, thereby potentially lowering costs for businesses and consumers and fostering competitive markets.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes the framework for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (the CEO). These TCOs apply to goods specified in the order, granting them a lower rate of customs duty. The Act applies to any person or entity seeking to import goods that are eligible for a TCO, provided the goods are not those specified in section 269SJ, which cannot be subject to a TCO. A TCO application is deemed to meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in the Act. The geographic reach of this legislation is national, given it operates under the Commonwealth framework of the Customs Act 1901. While the Act itself sets out the primary criteria and process, its application can be further detailed or modified through subordinate instruments, such as regulations or specific orders. The TCO No. 0502230, effective from 18 February 2005, is an example of such an instrument, applying a reduced duty rate to certain plastic pipe extrusion lines.
Key Provisions
The primary operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F (1) enables a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must then determine whether the application meets the core criteria, as outlined in sections 269C and 269P(3). If the application satisfies these criteria, the CEO is required to make a written order declaring that the goods are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, thus applying a lower rate of customs duty. For instance, in the case of TCO No. 0502230, certain plastic pipe extrusion lines were subject to a reduced duty rate of 3% instead of the general 5%.
The Act imposes several obligations on both the applicants and the CEO of Customs. Applicants must ensure their applications meet the core criteria, particularly demonstrating that no substitutable goods are produced in Australia. The CEO, on the other hand, must verify this criterion and, if satisfied, make a TCO. The CEO is also obligated to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted, as per subsection 269K(1). This requirement ensures transparency and allows for any relevant objections to be considered before the TCO is issued.
There are specific consequences for breaches related to TCOs, though they are not detailed in this explanatory statement. Generally, under the Customs Act 1901, breaches of customs regulations can lead to civil or criminal penalties. Civil penalties can include fines, while criminal penalties may result in imprisonment, depending on the severity of the offence. However, the explanatory statement does not provide specific maximum penalties for breaches in this context. Instead, it focuses on the procedural aspects of applying for and issuing TCOs. The rights of importers are protected, and the TCO does not impose any liabilities on any person other than the Commonwealth. This means that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force.