EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516067
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.
Elsema Pty Ltd applied for a TCO in respect of certain moulded plastic cases on 17 November 2005.
Instrument
TCO No 0516067 was made on 6 February 2006. It declares that those certain moulded plastic cases 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. 0516067 is taken to have come into force on 17 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 was enacted to provide for the administration of customs and excise duties and to facilitate international trade. The Act allows for Tariff Concession Orders (TCOs) which reduce the rate of customs duty on certain goods. The instrument in question, Tariff Concession Instrument No. 0516067, was introduced to address the specific issue of providing tariff concessions for certain moulded plastic cases, as applied for by Elsema Pty Ltd. This instrument was enacted by the Chief Executive Officer of Customs, in accordance with section 269F of the Customs Act 1901. The underlying policy objective is to support Australian businesses by potentially reducing the cost of imported goods, thus enhancing competitiveness without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These TCOs apply to goods for which an applicant has successfully applied, and the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. The Act provides a pathway for reducing or eliminating customs duties on specified goods, contingent upon meeting the core criteria outlined in the Act. The application process involves the CEO reviewing the application to ensure it does not pertain to goods explicitly excluded under section 269SJ, and then assessing whether the core criteria are satisfied according to sections 269C, 269B, and 269D of the Act. The geographic and jurisdictional reach of this legislation is nationwide, applying across Australia as it pertains to the Commonwealth's customs duties. The TCO mechanism allows for flexibility in the application process through subordinate instruments, which can specify additional criteria or processes for particular types of goods or industries. This legislation does not disadvantage existing parties, ensuring that the rights of importers are preserved and may benefit from duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0516067, under the Customs Act 1901, establish the process and criteria for granting a Tariff Concession Order (TCO) (sections 269C, 269F, 269K, and 269S). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. If the CEO is satisfied that the application is valid and meets the core criteria, including that no substitutable goods are produced in Australia (section 269C), the CEO must issue a written order (section 269P(3)). This order will apply a lower rate of customs duty or, in this case, free duty on the specified goods. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)).
The obligations imposed on parties by the Act include the requirement for applicants to ensure their applications meet the core criteria, specifically that no substitutable goods are produced in Australia at the time of application (section 269C). The CEO is obligated to evaluate the application against these criteria and, if satisfied, to issue a TCO (section 269F). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections or reasons against the TCO (subsection 269K(1)). In this case, the CEO did not receive any submissions.
Regarding offences, penalties, or consequences for breach, the explanatory statement does not explicitly detail penalties for non-compliance with the Act's provisions. However, the Act generally includes provisions for penalties for offences such as providing false or misleading information in an application or contravening the terms of a TCO. The penalties for such offences could include fines and, in severe cases, criminal charges. The exact penalties are determined by the courts based on the specific circumstances of each case and any relevant legislation governing such offences under the Customs Act 1901.