EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506112
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.
ASD Paper Recyclers applied for a TCO in respect of certain Recyclable Packaging Waste Sorters on 23 May 2005.
Instrument
TCO No 0506112 was made on 30 September 2005. It declares that those certain Recyclable Packaging Waste Sorters 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 0%.
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. One submission objecting to the TCO application was received from Majek Automation Pty Ltd.
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. 0506112 is taken to have come into force on 23 May 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, facilitates the implementation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can provide reduced rates of customs duty on specific goods. This mechanism addresses the problem of providing relief on customs duties for goods that are not produced domestically and where no suitable domestic alternatives exist. The Tariff Concession Instrument No. 0506112, enacted in 2005, is an example of this process in action. It was introduced to benefit importers by providing a zero percent duty rate on certain Recyclable Packaging Waste Sorters, as no substitutable goods were being produced in Australia at the time of the application. The policy objective of this legislative measure is to encourage the importation of goods that are not domestically produced, thereby supporting industries reliant on imported components.
Scope and Application
The Customs Act 1901 governs the administration of customs duty in Australia, including the process for Tariff Concession Orders (TCOs) under Part XVA. These orders provide for a reduced rate of customs duty on specified goods, which are determined by the Chief Executive Officer of Customs (the CEO) based on criteria such as the absence of substitutable goods produced in Australia. The legislation applies to any individual or entity seeking a tariff concession for goods that are not listed as ineligible under section 269SJ of the Act. The concessions extend to the entire Commonwealth, and the process involves an application to the CEO, followed by a Gazette notice inviting objections. TCO No. 0506112, for example, was issued for certain Recyclable Packaging Waste Sorters, reducing their duty rate from 5% to 0%. The TCO is effective from the date of application and does not retroactively affect any pre-existing rights or liabilities, although importers may claim duty refunds for goods imported since the TCO's effective date. The Act allows for further specification and regulation through subordinate instruments, such as the Customs Tariff Act 1995, which provides the tariff schedule referenced in the TCOs.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0506112 are sections 269C, 269B, 269D, 269E, 269P, and 269S. These sections outline the process for applying for and making a Tariff Concession Order (TCO). Section 269C requires that the Chief Executive Officer (CEO) of Customs determine if a TCO application meets the core criteria. Section 269B defines key terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ that are crucial for assessing an application. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a TCO must be made. Finally, section 269S(1) specifies that a TCO comes into force on the day the application is lodged.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person can apply for a TCO under section 269F, provided the goods in question are not listed in section 269SJ. The CEO must then evaluate the application against the core criteria set out in section 269C, ensuring no substitutable goods are being produced in Australia. If the application meets these criteria, the CEO must make a written TCO as outlined in section 269P(3). Additionally, the CEO must publish a notice in the Gazette, as required by section 269K(1), inviting any interested parties to submit objections to the proposed TCO. This ensures transparency and provides an opportunity for stakeholders to voice any concerns.
Failure to comply with the provisions of the Customs Act 1901 and the Tariff Concession Instrument can result in various penalties and consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act generally can lead to both civil and criminal penalties. Civil penalties may include fines, and in severe cases, criminal penalties such as imprisonment may be imposed. For instance, knowingly making a false statement or providing false information in an application for a TCO could result in fines or imprisonment under the Act. Importers who fail to comply with the requirements for applying for a refund of duty may also face financial penalties.
The Tariff Concession Instrument No. 0506112, which declares that certain Recyclable Packaging Waste Sorters are subject to a 0% duty rate, came into force on the date the application was lodged, 23 May 2005. This means that importers of these goods can benefit from the reduced duty rate from that date onwards. Importantly, the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or incurs liabilities for actions taken before the TCO was registered. This provision protects the rights of importers and ensures that the new tariff rates apply prospectively, from the date the TCO was taken to have come into force.