EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613387
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.
Amcor Fibre Packaging Australia applied for a TCO in respect of certain corrugator machine parts on 11 August 2006.
Instrument
TCO No 0613387 was made on 27 October 2006. It declares that those certain corrugator parts 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. 0613387 is taken to have come into force on 11 August 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 to regulate the importation and exportation of goods in Australia, providing a framework for the collection of customs duties and the implementation of trade policies. The Tariff Concession Instrument No. 0613387 was introduced in 2006 to address the gap in the tariff scheme by allowing for tariff concessions on specific goods when certain conditions are met. This instrument was made under the authority of the Chief Executive Officer of Customs, who is mandated to consider applications for tariff concessions under section 269F of the Act. The policy objective of this instrument is to provide relief on customs duties for goods that are not substitutable by Australian-produced goods, thereby supporting industries that rely on the importation of specific components or materials. The instrument came into force on the date the application was lodged, ensuring that the rights of importers are protected and potentially benefiting them through duty refunds on goods imported since the effective date of the concession.
Scope and Application
The Customs Act 1901, as amended, provides a framework for the regulation of imports and exports in Australia, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on specified goods. The Act applies to any person or entity that wishes to import goods that may be subject to a TCO, and the scope of the Act extends across all states and territories within Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act, which outlines those goods that cannot be subject to a TCO. The Act’s application can be further extended or restricted through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to different goods. The process for applying for a TCO includes the publication of the application in the Gazette, inviting public submissions, and consideration by the CEO, as per section 269K of the Act. An example of the application of this process is Tariff Concession Instrument No. 0613387, which was made in respect of certain corrugator machine parts and declared that these parts are subject to a zero rate of duty under the Customs Tariff.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0613387, are sections 269F, 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901, and Schedule 4 of the Customs Tariff Act 1995. Section 269F allows for the application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning particular goods. If the CEO determines that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged, a TCO is made. The TCO then specifies that the goods in question are subject to a prescribed rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties or entities it governs are primarily concerned with the process of applying for and making a TCO. The CEO must ensure that an application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for a concession. If the CEO is satisfied that the application meets the core criteria, they must make a written TCO. Additionally, the CEO is required to publish a notice in the Gazette, inviting any person to lodge a submission if they believe there are reasons why the TCO should not be made. In this case, the CEO did not receive any submissions.
In terms of potential offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly state any specific offences related to the process of applying for or making a TCO. However, failure to comply with the terms of the TCO could potentially lead to civil or administrative penalties. For example, if a person knowingly imports goods that should have duty concessions applied but fails to take advantage of them, they might face penalties under other provisions of the Customs Act 1901. The maximum penalties for breaches of customs laws can vary significantly depending on the nature and value of the goods involved, and can include substantial fines and, in some cases, imprisonment.