EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609749
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.
Economos Australia Pty Ltd applied for a TCO in respect of certain plastic seal blanks on 07 June 2006.
Instrument
TCO No 0609749 was made on 18 August 2006. It declares that those certain plastic seal blanks 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. 0609749 is taken to have come into force on 07 June 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. 0609749 was enacted in 2006 under the Customs Act 1901, establishing a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This instrument was introduced to address the need for tariff concessions that apply a lower rate of customs duty to certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia in the ordinary course of business. The Customs Act 1901, enacted by the Australian Parliament, serves as the legislative foundation for this mechanism, facilitating economic benefits by reducing the cost of imported goods under certain conditions. The policy objective is to support Australian businesses by ensuring they are not disadvantaged by the imposition of duties on goods for which locally-produced alternatives do not exist, thereby promoting competitive market conditions.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity seeking to import goods that may qualify for a reduced rate of customs duty through the TCO scheme. The TCO process is available for goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The Act also ensures that a TCO will not disadvantage any person by affecting their rights as they stood at the date of registration, and it does not impose any liabilities on individuals or entities. The geographic reach of the Act is national, applying across Australia under the Commonwealth's authority. The Act's application can be further refined through subordinate instruments, which may provide additional details or exceptions. Importantly, the TCO for specific goods, such as certain plastic seal blanks, can result in a lower rate of duty, enhancing the rights of importers who can seek refunds for duties paid on such goods prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCOs), which are orders that apply lower rates of customs duty to certain goods. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning particular goods. Provided the goods are not specified in section 269SJ as ineligible for a TCO, the CEO must evaluate whether the application meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
Once the CEO determines that the application meets the core criteria, section 269P(3) mandates that the CEO must issue a written order, which is the TCO. This order declares that the goods subject to the application are subject to a specific item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a prescribed rate of duty. For instance, TCO No. 0609749, made on 18 August 2006, declared that certain plastic seal blanks are subject to item 50 of Schedule 4, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application does not pertain to goods specified in section 269SJ and must thoroughly assess whether the application meets the core criteria. Furthermore, under section 269K(1), the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice invites any interested parties to submit objections if they believe the TCO should not be made. Although the CEO did not receive any submissions in response to the notice for TCO No. 0609749, this step is a critical part of the process to ensure transparency and allow for stakeholder input.
The Customs Act 1901 also outlines consequences for non-compliance. Any breach of the provisions regarding TCOs could lead to civil or criminal penalties, although specific penalties are not detailed in the Act itself. It is understood that any actions that contravene the conditions set by the TCO or the Act could potentially lead to legal action. For instance, if a party deliberately imports goods in a manner that circumvents the terms of a TCO, they could face penalties under the relevant sections of the Customs Act 1901 or other applicable laws. However, the exact nature and severity of these penalties would depend on the specific circumstances and the applicable legal framework at the time of the alleged breach.