EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0604622
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.
Visy Industrial Plastics Pty Ltd applied for a TCO in respect of certain compression plastic moulders on 1 March 2006.
Instrument
TCO No 0604622 was made on 17 May 2006. It declares that those certain compression plastic moulders 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. 0604622 is taken to have come into force on 1 March 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. 0604622 was enacted under the Customs Act 1901 in 2006, aiming to address the need for a streamlined process in granting tariff concessions on specific goods. This instrument empowers the Chief Executive Officer of Customs to reduce the customs duty on certain goods, provided they meet the core criteria outlined in the Act. The process allows for lower duty rates on goods that are not substitutable and not produced in Australia in the ordinary course of business. This legislative initiative was designed to enhance trade efficiency by offering tariff relief on specific items, thereby reducing the financial burden on importers and potentially boosting trade activities. The instrument was introduced by the Parliament of Australia with the policy objective of facilitating smoother trade operations by providing duty concessions on goods that are not domestically produced and do not have substitutable alternatives.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity that seeks to import goods eligible for tariff concessions, provided the goods are not specified in section 269SJ, which excludes certain types of goods from the concession scheme. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. If the CEO determines that the application meets these core criteria, a TCO is issued, effectively applying a prescribed lower rate of duty to the specified goods. The geographic reach of this Act is national, as it operates under the Commonwealth jurisdiction, and it extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the reduced tariff rates. Notably, the Act does not disadvantage any person by affecting their rights as at the date of registration nor impose any liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation concern the Tariff Concession Orders (TCOs) as outlined in Part XVA of the Customs Act 1901 (section 269F). Section 269F enables a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. This application process is further governed by section 269C, which stipulates that an application meets the core criteria if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definition of these terms is provided in sections 269D, 269E, and 269B of the Act. If the CEO is satisfied that the application meets these criteria, they must issue a written order, a TCO, declaring that the specified goods are subject to a particular item of Schedule 4 in the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes several obligations and requirements on the parties involved. Firstly, any person applying for a TCO must ensure that their application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. Additionally, the CEO must act promptly by publishing a notice in the Gazette (subsection 269K(1)) as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions. If the CEO receives submissions, they must consider these before making a final decision. If no submissions are received, the CEO proceeds to decide on the application based on the core criteria.
The Act also outlines specific consequences for non-compliance. While the explanatory statement does not detail civil or criminal penalties, breaches of the Customs Act 1901 can generally result in significant penalties. For example, under section 281 of the Act, a person who knowingly or recklessly makes a false or misleading statement in an application or in any other document required under the Act can be subject to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both. Furthermore, section 283 imposes penalties for failure to comply with certain provisions, which can include fines of up to 10,000 penalty units and imprisonment for up to two years, or both. These provisions ensure that the integrity of the customs duty system is maintained and that any breaches are adequately addressed.