EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602200
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.
Phillip Morris applied for a TCO in respect of certain cigarette packaging machinery on 12 January 2006.
Instrument
TCO No 0602200 was made on 24 March 2006. It declares that those certain cigarette packaging machinery 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. 0602200 is taken to have come into force on 12 January 2006.
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. 0602200 was enacted under the Customs Act 1901 to provide a reduced rate of customs duty on certain cigarette packaging machinery, as requested by Phillip Morris. The instrument was introduced to address the problem of ensuring that such machinery, which was not produced in Australia, could be imported without incurring high duty costs, thereby supporting the importation of these specific goods for use in the tobacco industry. The Customs Act 1901, enacted by the Australian Parliament, allows for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs when certain criteria are met, including the absence of substitutable goods produced in Australia. The policy objective is to facilitate the importation of necessary goods for industries, provided they are not being produced domestically, without imposing undue financial burdens on importers.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0602200, applies to individuals or entities that seek tariff concessions for specific goods imported into Australia. This instrument, issued under section 269F of the Act, is pertinent to any applicant who can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, in line with the criteria outlined in sections 269C and 269D of the Act. This concession primarily benefits the importer of the specified goods, allowing them to claim a refund of duty on goods imported since the date the TCO is deemed to have come into force. Geographically, the application of this Act and its related instrument is nationwide, impacting trade and import duties across all states and territories of Australia. The Act does not disadvantage any person by affecting their rights as at the date of registration or impose liabilities on anyone for actions taken prior to the registration of the TCO. The Act's scope may be further extended or restricted through subordinate instruments, ensuring flexibility in its application to various goods and industries.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines the framework for Tariff Concession Orders (TCOs) under section 269F. This allows the Chief Executive Officer of Customs (CEO) to grant a TCO to an applicant, such as Phillip Morris in this instance, provided the goods in question do not fall under the exclusions listed in section 269SJ. To be approved, an application must satisfy the core criteria set out in section 269C, which necessitates that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of terms like "substitutable goods" and "ordinary course of business" are provided in sections 269D, 269E, and 269P(3) of the Act.
The obligations imposed by the Act on parties include the requirement for the CEO to thoroughly assess each TCO application. This involves ensuring that the application aligns with the criteria set out in section 269C and publishing a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). The CEO must also determine if the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as seen in the case of Phillip Morris's application for the cigarette packaging machinery. Additionally, the TCO must be made in writing and clearly state the tariff treatment of the specified goods.
Section 269S(1) of the Act stipulates that a TCO comes into force on the date the application was lodged, which in this case is 12 January 2006 for TCO No. 0602200. The Act also ensures that the TCO does not adversely affect the rights of any person, other than the Commonwealth, who had rights as at the date of registration. Importantly, the TCO provides benefits to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. There are no imposed liabilities on any person due to the TCO.
For breaches of the provisions under the Customs Act 1901, the Act outlines specific penalties and consequences. While the explanatory statement does not detail specific offences or penalties, the general framework of the Act implies that non-compliance could lead to civil or criminal penalties. The maximum penalties for offences under the Customs Act can include fines and imprisonment, depending on the severity of the breach. The exact penalties would be determined based on the specific nature of the breach and relevant sections of the Act.