EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516813
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.
Simplot Australia Pty Ltd applied for a TCO in respect of certain plastic bag seal machines on 20 December 2005.
Instrument
TCO No 0516813 was made on 03 March 2006. It declares that those certain plastic bag seal machines 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. 0516813 is taken to have come into force on 20 December 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. 0516813, enacted in 2006, addresses the need for tariff concessions under the Customs Act 1901 to support specific industries or goods that are not domestically produced. This instrument was developed in response to an application by Simplot Australia Pty Ltd for tariff concessions on certain plastic bag seal machines, allowing these goods to benefit from a reduced customs duty rate, specifically from a general rate of 5% to free of charge, provided no substitutable goods are produced in Australia. The instrument was made by the Chief Executive Officer of Customs following the required legislative process and public consultation, and it came into effect on the date the application was lodged, 20 December 2005. This instrument ensures that the rights of importers are beneficially affected and that no liabilities are imposed on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0516813 under the Customs Act 1901 applies to specific plastic bag seal machines, allowing for a tariff concession where a lower rate of customs duty is applied, effectively setting the duty rate at free. This instrument extends to any person who applies for a tariff concession order (TCO) for goods that meet the criteria specified under section 269C of the Act. The application process is governed by the Act, requiring the Chief Executive Officer of Customs to assess whether the application meets the core criteria, particularly that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act is national, applying across Australia as it is a Commonwealth Act. However, it excludes goods specified in section 269SJ of the Act, which are ineligible for a TCO. The TCO, once made, affects the rights of importers beneficially, allowing them to apply for a refund of duty on imported goods since the date the TCO is deemed to have come into effect, without imposing any new liabilities on any person. The instrument was registered on 3 March 2006, but is taken to have come into force on the date the application was lodged, 20 December 2005.
Key Provisions
The Tariff Concession Instrument No. 0516813, under the Customs Act 1901, establishes a framework for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCO) (s 269F). These orders allow for a lower rate of customs duty on specified goods. For instance, section 269C of the Act requires that for a TCO application to meet core criteria, there must be no substitutable goods produced in Australia on the day the application was lodged. Substitutable goods are defined in section 269D as those produced in Australia that can be used for the same purpose as the goods in question. If the CEO is satisfied that the application meets these criteria, they must issue a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (s 269P(3)). In this particular case, TCO No. 0516813 applies to certain plastic bag seal machines, reducing the duty from 5% to free.
The obligations imposed by this Act on the parties involved are primarily on the CEO, who must assess the validity of TCO applications against the criteria set out in sections 269B to 269D. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit their views on the application as soon as practicable after accepting it as valid (s 269K(1)). This ensures transparency and allows for public scrutiny of the decision-making process. Additionally, the TCO must not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date (s 269S(1)). The rights of importers are specifically protected, allowing them to apply for duty refunds on goods imported since the TCO is deemed to have come into force.
Failure to comply with the requirements of the Customs Act 1901 can lead to civil or criminal consequences. For instance, if an entity knowingly contravenes a provision of the Act, it could face penalties. The maximum penalty for a corporation under section 285 of the Act is 500 penalty units, while an individual officer of the corporation could be subject to a penalty of 100 penalty units under section 286. These provisions ensure that the legislation is enforced and that entities are held accountable for non-compliance. The penalties are designed to deter violations and maintain the integrity of the customs duty regime.