EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504376
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.
Australian Char Pty Ltd applied for a TCO in respect of certain preformed flat bags filling and closing machines on 13 April 2005.
Instrument
TCO No 0504376 was made on 09 September 2005. It declares that those certain preformed flat bags filling and closing machines 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. 0504376 is taken to have come into force on 13 April 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 was enacted by the Australian Parliament to provide for the regulation of customs and excise, including the imposition of duties and the control of goods entering and leaving Australia. A key aspect of this Act is the provision for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty to be applied to specified goods, provided certain criteria are met. The Customs Act 1901 thus addresses the need to facilitate trade by reducing the cost of imported goods through concessional tariffs, while also ensuring that the concessions do not undermine the production of similar goods within Australia. The instrument in question, Tariff Concession Instrument No. 0504376, was introduced to provide tariff concessions for certain preformed flat bags filling and closing machines, in response to an application by Australian Char Pty Ltd. The instrument was enacted to ensure that these specific machines are subject to a free rate of duty, aligning with the policy objective of supporting trade and industry by lowering the cost of essential machinery.
Scope and Application
The Customs Act 1901 governs the application of Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on specified goods. The Act applies to any person or entity that seeks a TCO for goods, ensuring that the application process is overseen by the Chief Executive Officer of Customs (CEO). This legislation is applicable on a national level, as it pertains to Commonwealth customs laws. The scope of the Act is directed towards specific goods that are subject to a TCO, particularly those where no substitutable goods are produced in Australia. Excluded from TCOs are goods specified in section 269SJ of the Act, which are deemed unsuitable for tariff concessions. The application of the Act may be extended or clarified through subordinate instruments, such as regulations, which may provide additional criteria or procedures for TCO applications. Australian Char Pty Ltd successfully applied for a TCO on certain preformed flat bags filling and closing machines, resulting in a tariff concession that lowered the duty from 5% to free, effective from the date the application was lodged.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269F, and 269P) establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Specifically, section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while section 269C mandates that a TCO application must meet core criteria, which include the absence of substitutable goods produced in Australia at the time of application. Section 269P stipulates that if the CEO is satisfied that the application meets these criteria, a written order (TCO) must be made, effectively applying a prescribed lower rate of customs duty to the goods in question.
The Act imposes several obligations on the parties involved. The applicant, such as Australian Char Pty Ltd in this case, must submit an application to the CEO, ensuring it complies with the core criteria specified in section 269C. The CEO, on receiving a valid application, is required to make a decision based on the criteria and, if satisfied, issue a TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, although no submissions were received in this instance as per section 269K(1).
In terms of penalties and consequences for breach, the Act does not explicitly state penalties for non-compliance with the TCO provisions. However, failure to adhere to the conditions set forth by the CEO for issuing a TCO or any fraudulent application could potentially lead to legal actions. The CEO has the authority to review and potentially revoke a TCO if it is found that the criteria were not correctly applied or if there is any misleading information in the application. While the maximum penalties are not explicitly mentioned in the text, any breaches of the Customs Act or related regulations could lead to civil or criminal sanctions, including fines or imprisonment, depending on the severity and intent behind the breach.