EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515406
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 continuous plastic granulates dryers on 07 November 2005.
Instrument
TCO No 0515406 was made on 30 January 2006. It declares that those certain continuous plastic granulates dryers 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. 0515406 is taken to have come into force on 07 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework through which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to apply lower rates of customs duty on certain goods. This legislative measure addresses the gap in the duty structure by offering tariff concessions where no substitutable goods are produced in Australia. The problem it aims to resolve is the potential economic disadvantage faced by businesses importing specific goods for which no local alternatives exist. The instrument in question, Tariff Concession Instrument No. 0515406, was introduced following an application from Fleming Plastics Dynamics Pty Ltd for tariff concessions on continuous plastic granulates dryers, approved on 30 January 2006. This instrument effectively reduces the duty on these specific goods from 5% to free, effective from 7 November 2005, the date the application was lodged. The policy objective is to support Australian importers by alleviating the financial burden of customs duties on goods for which no domestic substitutes are available, thereby fostering a competitive market environment.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO), which apply lower rates of customs duty to specific goods. The legislation applies to individuals or entities seeking tariff concessions for goods that are not produced domestically and are not listed in section 269SJ of the Act as ineligible for TCO. The geographic reach of the Act is national, as it pertains to the importation of goods into Australia. The application process requires meeting core criteria, including the absence of substitutable goods produced in Australia, as defined under sections 269D and 269E of the Act. The scope of the Act extends to all industries and goods eligible for tariff concessions, subject to the specified criteria and exclusions. The Act may be further defined through subordinate instruments, although the primary focus remains on ensuring that tariff concessions are granted judiciously and do not disadvantage existing stakeholders or impose new liabilities.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0515406, under the Customs Act 1901, concern the application and approval of a Tariff Concession Order (TCO) for certain continuous plastic granulates dryers. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question are not prohibited under section 269SJ. The CEO then assesses whether the application meets the core criteria outlined in section 269C, which require that no substitutable goods were produced in Australia at the time the application was lodged. This involves ensuring that the goods subject to the TCO are not produced domestically in a way that could substitute for the imported goods, as defined by section 269D for 'goods produced in Australia' and section 269E for 'ordinary course of business'.
The obligations imposed by the Act on the parties involved are straightforward. The applicant must ensure their application is for goods that do not contravene the restrictions under section 269SJ and that they meet the core criteria as per section 269C. The CEO is required to review the application and make a decision based on the evidence provided, ensuring that the application complies with the legislative framework. Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be granted, although in this case, no submissions were received.
Should any party fail to comply with the provisions of the Customs Act 1901 or the terms of the TCO, there are potential consequences. Although the explanatory statement does not specify particular offences or penalties, breaches of the Customs Act can generally lead to civil or criminal penalties. The Act itself outlines various offences, including fraudulent attempts to evade duty, which can attract significant fines and imprisonment. The maximum penalties for such offences are detailed in other sections of the Customs Act and related legislation, but these are not explicitly stated in the explanatory statement for this particular TCO. The consequences for non-compliance could also include the forfeiture of goods and the disallowance of any tariff benefits under the TCO.