EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515403
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.
Fleming Plastics Dynamics Pty Ltd applied for a TCO in respect of certain recycling plastic granulators on 04 November 2005.
Instrument
TCO No 0515403 was made on 30 January 2006. It declares that those certain recycling plastic granulators 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. 0515403 is taken to have come into force on 04 November 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. 0515403 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions for specific goods that are not produced domestically in Australia. This legislative instrument allows for a lower rate of customs duty on goods that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO). The aim of this legislation is to provide relief on certain imported goods by allowing tariff concessions when no substitutable goods are produced in Australia, thereby promoting trade and reducing costs for importers of these goods. The CEO was satisfied that the application from Fleming Plastics Dynamics Pty Ltd for a TCO on recycling plastic granulators met the core criteria, leading to the issuance of the TCO on 30 January 2006, which reduced the duty rate on these goods from 5% to free. The TCO was published in the Gazette, inviting public submissions, none of which were received, and it came into force on 4 November 2005, the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking to import goods into Australia, provided these goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The scope of the Act extends to any application made for a TCO under section 269F, where the applicant must demonstrate that no substitutable goods are produced in Australia, as defined under sections 269D and 269E, for the goods in question. Upon satisfying these criteria, the CEO must issue a written order that provides a concession on the duty payable for the specific goods, effectively applying a lower rate of customs duty or making it free, as illustrated in TCO No. 0515403 concerning recycling plastic granulators. The Act operates nationally and its application can be further defined through subordinate instruments. Importantly, the Act ensures that the issuance of a TCO does not affect any existing rights or impose new liabilities on individuals or entities except the Commonwealth, thereby protecting stakeholders from retrospective disadvantage or additional burdens.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0515403 under the Customs Act 1901 (section 269F) pertain to the application process for a Tariff Concession Order (TCO). An applicant can request a TCO for specific goods, provided these goods are not listed in section 269SJ, which excludes certain goods from eligibility. The Chief Executive Officer of Customs (CEO) must then determine if the application meets the core criteria, which is assessed under section 269C. Specifically, the application meets the criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business. If satisfied, the CEO issues a written TCO (section 269P(3)).
The obligations and requirements imposed by this Act on the parties it governs include the process for applying for a TCO and the conditions that must be met for the application to be successful. The CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be granted (subsection 269K(1)). If no submissions are received, the CEO proceeds to evaluate the application against the core criteria. Once a TCO is issued, it provides a tariff concession for the specified goods, which in this case are recycling plastic granulators, and the general rate of duty is set to free.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly outline specific penalties for failing to comply with the TCO provisions. However, breaches of the Customs Act 1901 generally can result in civil or criminal penalties. For instance, knowingly making a false statement in a Customs declaration can lead to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, under section 232 of the Act. Additionally, failure to comply with any requirements or obligations under the Customs Act, such as incorrect or fraudulent claims for tariff concessions, can result in financial penalties or legal action as deemed appropriate by the courts.
The TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, except the Commonwealth. The rights of importers are beneficially affected as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations). This provision ensures that the rights of existing stakeholders are preserved while new concessions are applied to future transactions.