EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602381
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 Equipment applied for a TCO in respect of certain plastics handlers on 16 January 2006.
Instrument
TCO No 0602381 was made on 24 March 2006. It declares that those certain plastics handlers 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 0%.
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. 0602381 is taken to have come into force on 16 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 Customs Act 1901, enacted by the Commonwealth Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This Act was introduced to address the need for tariff concessions that provide relief to certain goods, thereby encouraging trade and investment by reducing customs duty on specific items not produced domestically. The explanatory statement for Tariff Concession Instrument No. 0602381 outlines the process and criteria for granting TCOs, where a TCO application is assessed to ensure that the goods in question are not substitutable by Australian-made products, as per the core criteria outlined in section 269C of the Act. The policy objective is to ensure that the application of tariff concessions benefits importers by reducing the duty payable on eligible imported goods, as evidenced by the 0% duty rate on certain plastics handlers specified in the TCO No. 0602381.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) that can lower the rate of customs duty on specific goods, provided these goods are not listed in section 269SJ which excludes certain goods from TCO eligibility. Section 269F allows any person to apply to the Chief Executive Officer of Customs for a TCO if they believe that the goods in question meet the core criteria outlined in sections 269C, 269B, 269D, 269E, and 269P(3) of the Act. The CEO must ensure that the application does not pertain to goods that are substitutable and produced in Australia in the ordinary course of business. If the CEO determines that the application meets the criteria, they are mandated to issue a TCO, which effectively alters the customs duty rate as specified in the Customs Tariff Act 1995. The TCO applies nationally and impacts the importation of the specified goods, offering a tariff concession from the general rate to the rate prescribed in the TCO. The application of this Act is not limited by state or territory boundaries, applying Commonwealth-wide. Exclusions are strictly defined within section 269SJ, and no submissions were received in response to the published notice inviting objections to the TCO application, indicating no grounds were presented against the concession. The TCO does not affect pre-existing rights or impose liabilities on any person aside from the Commonwealth, and it can confer benefits such as duty refunds on importers of the affected goods.
Key Provisions
The main operative sections of this legislation (subsections 269P(3) and 269K(1) of the Customs Act 1901) set out the process by which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). If an application for a TCO is made and the CEO determines that it meets the core criteria, they must make a written order, declaring that the goods specified in the application are subject to a lower rate of customs duty (section 269P(3)). The CEO must also publish a notice in the Gazette, inviting submissions from anyone who believes the TCO should not be made (subsection 269K(1)).
The obligations imposed on the parties by this Act include the requirement for applicants to ensure their applications meet the core criteria, as specified by sections 269C, 269B, and 269D. The CEO is required to review applications, decide whether they meet the criteria, and if so, issue a written TCO and publish a notice in the Gazette. The CEO is also responsible for ensuring that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the date of registration.
In terms of breaches and consequences, the Act does not explicitly state any offences, penalties, or consequences for failure to comply with its provisions. However, the legislation’s overarching purpose and the procedural requirements suggest that non-compliance with the obligations to correctly apply for and issue TCOs could lead to legal challenges or disputes regarding the validity of a TCO. Such disputes could potentially be resolved through the courts, with the outcomes depending on the specific circumstances and the interpretation of the Act by the judicial authorities.