EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612276
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.
Hester Holdings Pty Ltd applied for a TCO in respect of certain tubing vacuum formers on 3 November 2006.
Instrument
TCO No 0612276 was made on 19 January 2007. It declares that those certain tubing vacuum formers 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. 0612276 is taken to have come into force on 3 November 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 was enacted by the Parliament of Australia to provide for the regulation of customs and excise duties and to establish the framework for the administration of these duties. The Act, which was introduced to address the need for a structured approach to the collection of customs duties and the regulation of imports and exports, includes provisions for the application of tariff concession orders (TCOs) under Part XVA. This part of the Act allows the Chief Executive Officer of Customs to grant tariff concessions to applicants under certain conditions, primarily to support industries by reducing the customs duty on specific goods that are not produced domestically. The policy objective is to stimulate economic activity by making imported goods more competitive with locally produced alternatives, thereby encouraging trade and potentially enhancing industry growth. The Customs Act 1901 thus aims to balance the revenue interests of the government with the economic needs of various sectors by providing a mechanism for tariff reductions on eligible imported goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the scheme for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs (CEO). These orders apply to goods for which an application has been made and approved, resulting in a reduced rate of customs duty. The Act applies to individuals or entities that apply for a TCO on behalf of goods that meet the specified criteria. The CEO must determine whether the application aligns with the core criteria outlined in the Act, particularly ensuring that no substitutable goods are produced in Australia at the time of application. Geographically, the application and effect of the TCO are within the Commonwealth jurisdiction. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ. The CEO is mandated to publish a notice in the Gazette inviting submissions on the TCO application, though no submissions were received in this instance. The TCO comes into effect on the date the application was lodged, with retrospective benefits for importers who may apply for duty refunds from that date, without imposing any liabilities on non-Commonwealth persons.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0612276, under the Customs Act 1901, concern the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO application may be submitted if the goods in question are not specified in section 269SJ of the Act (s 269SJ). If the CEO determines that the application meets the core criteria (s 269C), a TCO must be issued (s 269P(3)). This particular TCO, No. 0612276, made on 19 January 2007, applies to certain tubing vacuum formers, declaring that they are subject to item 50 of Schedule 4 to the Tariff, with a reduced duty rate of 0% (s 269P(3)). The general rate of duty on these goods is 5%.
The Act imposes specific obligations and requirements on parties and entities it governs. Firstly, the CEO is required to ensure that the application for a TCO is valid and meets the core criteria set out in section 269C of the Act. This includes verifying that no substitutable goods are produced in Australia (s 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (s 269K(1)). The CEO is also responsible for ensuring that the TCO does not affect the rights of a person, other than the Commonwealth, in a way that disadvantages that person or imposes liabilities for actions taken prior to the TCO's registration (s 269S(1)).
The Customs Act 1901 provides for various offences, penalties, or civil and criminal consequences for breaches of its provisions. While the explanatory statement does not detail specific offences or penalties related to the making of a TCO, breaches of other sections of the Customs Act or related regulations could result in substantial penalties. For instance, knowingly making a false statement or representation in connection with a customs matter can attract fines of up to $11,000 or imprisonment for up to two years, or both (s 231A). Additionally, failure to comply with a TCO could result in penalties under the Customs Act or other relevant legislation, including fines and potential criminal charges for more severe infractions.
In summary, Tariff Concession Instrument No. 0612276 establishes a TCO for certain tubing vacuum formers, reducing their customs duty from 5% to 0%. The CEO is tasked with ensuring that applications meet the core criteria and publishing notices inviting submissions. The Act provides protections against the TCO adversely affecting the rights of non-Commonwealth entities. While specific penalties for TCO breaches are not detailed, the broader Customs Act outlines significant penalties for related offences.