EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510731
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.
AFB Storage Solutions Pty Ltd applied for a TCO in respect of certain Plastic Storage Racks on 16 August 2005.
Instrument
TCO No 0510731 was made on 28 October 2005. It declares that those certain Plastic Storage Racks 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. 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. 0510731 is taken to have come into force on 16 August 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 Tariff Concession Instrument No. 0510731, enacted in 2005 under the Customs Act 1901, addresses the need for tariff concessions for specific goods by authorising the Chief Executive Officer of Customs to grant such concessions. This instrument was introduced to ensure that certain goods, in this case Plastic Storage Racks, can benefit from reduced customs duty rates, provided they meet specific criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The policy objective is to support Australian businesses by reducing the cost of importing goods that are not domestically produced, thereby enhancing their competitiveness. The instrument was enacted by the Australian government, ensuring that it aligns with broader economic policies aimed at fostering trade and industry.
Scope and Application
The Tariff Concession Instrument No. 0510731 under the Customs Act 1901 applies to specific goods, namely certain Plastic Storage Racks, which are designated to benefit from a lower rate of customs duty. The instrument is applicable to entities that import these goods, thereby potentially reducing their duty liabilities. The scope of this Act extends across the Commonwealth of Australia, ensuring that the tariff concession applies uniformly nationwide. The instrument was triggered by an application from AFB Storage Solutions Pty Ltd on 16 August 2005, and was subsequently made on 28 October 2005 by the Chief Executive Officer of Customs, following a determination that no substitutable goods were produced in Australia at the time of the application. This instrument is an extension of the core provisions outlined in sections 269C, 269B, and 269P of the Customs Act 1901, and it adheres to the requirement under section 269K(1) that invites public submissions on the application, though none were received in this instance. The instrument is effective from the date the application was lodged, thereby ensuring that importers can avail themselves of the reduced duty rate from that date forward, with no retrospective effect on past transactions.
Key Provisions
The Customs Act 1901 (the Act) under Part XVA allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (section 269F). A TCO results in a reduced rate of customs duty on goods specified in the order. The Act specifies the core criteria that an application for a TCO must meet (section 269C). Specifically, the application must be for goods that are not specified in section 269SJ of the Act, and on the day the application was lodged, no substitutable goods must have been produced in Australia in the ordinary course of business (section 269C). Definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269P of the Act, respectively. If the CEO determines that an application meets these core criteria, a TCO must be made (section 269P(3)).
Entities or individuals applying for a TCO must ensure that their application adheres to the criteria outlined in the Act. They must demonstrate that the goods for which the TCO is sought are not listed in section 269SJ and that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is mandated to publish a notice in the Gazette, inviting submissions from any person who believes there are reasons the TCO should not be made (subsection 269K(1)). In the case of TCO No. 0510731, no submissions were received in response to this invitation. The TCO comes into effect on the date the application was lodged (subsection 269S(1)), in this instance, 16 August 2005. The TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth concerning actions taken before the registration date.
Non-compliance with the provisions of the Act, particularly concerning the submission of false information or failure to meet the core criteria for a TCO, could lead to various legal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Customs Act generally could result in significant penalties. The Act encompasses a range of civil and criminal penalties, with the severity depending on the nature and extent of the breach. For example, knowingly making a false statement or providing misleading information could lead to fines and imprisonment under sections 243AC and 243AD of the Act, with maximum penalties including fines of up to 10,000 penalty units and imprisonment for up to 10 years. Additionally, failure to comply with the terms of a TCO could result in the imposition of duties retrospectively and additional fines.