EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616189
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 applied for a TCO in respect of certain corrugated carton board conveyors on 29 August 2006.
Instrument
TCO No 0616189 was made on 24 November 2006. It declares that those certain corrugated carton board conveyors 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. 0616189 is taken to have come into force on 29 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 by the Commonwealth Parliament to facilitate the regulation of imports and exports, including the imposition of customs duties on goods. The Act provides for Tariff Concession Orders (TCOs) which may reduce the rate of customs duty on specified goods. This legislative instrument, F2006L03867, was introduced to address the need for tariff concessions in specific circumstances, particularly where substitutable goods are not produced in Australia. The instrument declares that certain corrugated carton board conveyors are subject to a tariff concession, resulting in a rate of duty of free, as opposed to the general rate of 5%. The instrument was made following an application by Amcor Fibre Packaging, and no submissions were received in opposition to the concession. The policy objective here is to facilitate trade by reducing the cost of imported goods where local production is not a viable alternative.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that grant lower rates of customs duty on certain goods. These orders apply to goods that are the subject of an application made under section 269F of the Act, provided the application is not in relation to goods specified in section 269SJ, which are ineligible for such concessions. For an application to be considered, it must meet the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This legislation operates nationally across Australia, with the CEO having the authority to make such orders. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not proceed, although no submissions were received for TCO No. 0616189. This particular TCO, which became effective on the date of application, 29 August 2006, specifically reduced the duty on certain corrugated carton board conveyors from the general rate of 5% to free. Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth, and it allows importers to apply for a refund of duty paid on these goods since the effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0616189 under the Customs Act 1901 (sections 269C, 269P, and 269SJ) outline the conditions under which Tariff Concession Orders (TCOs) may be granted. According to section 269C, a TCO can be made if the Chief Executive Officer (CEO) of Customs is satisfied that no substitutable goods are being produced in Australia at the time the application is lodged. If the CEO determines that the application meets these core criteria, they must issue a TCO as specified in section 269P(3). This TCO will apply to the particular goods identified in the application, thereby altering the rate of customs duty applicable to those goods, as seen in the case of the corrugated carton board conveyors where the duty rate is reduced from 5% to free.
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that their application is valid and meets the core criteria as outlined in section 269C. This involves providing sufficient evidence that no substitutable goods are being produced in Australia. The CEO, on the other hand, is required to review the application, determine if it meets the criteria, and if so, publish a notice in the Gazette inviting submissions from interested parties. In the case of TCO No. 0616189, no submissions were received, and the CEO proceeded to issue the TCO.
Should any party fail to comply with the obligations set forth by the Customs Act 1901, there can be significant consequences. While the explanatory statement does not explicitly detail penalties for non-compliance, breaches of similar nature under the Act can typically result in both civil and criminal penalties. Civil penalties can include fines, and in more severe cases, criminal penalties may apply, leading to prosecution. The exact penalties would depend on the nature and severity of the breach, but they can be substantial, reflecting the seriousness of circumventing the legislative framework designed to regulate customs duties effectively.