EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616831
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.
Poli-Film Australia Pty Ltd applied for a TCO in respect of certain roll slitters on 06 September 2006.
Instrument
TCO No 0616831 was made on 24 November 2006. It declares that those certain roll slitters 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. 0616831 is taken to have come into force on 06 September 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, enacted by the Parliament of Australia, establishes a framework for the imposition of customs duties on imported goods. The Act provides for Tariff Concession Orders (TCOs) under Part XVA, which allow for a reduced rate of duty on specified goods when certain criteria are met. The Tariff Concession Instrument No. 0616831 was introduced to provide tariff concessions to certain roll slitters, which are now subject to a 0% duty rate instead of the general 5% rate. This instrument was made on 24 November 2006, following an application by Poli-Film Australia Pty Ltd on 6 September 2006. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia in the ordinary course of business, thereby meeting the core criteria for a TCO under section 269C of the Act. The tariff concession is designed to benefit importers of these goods by allowing them to apply for a refund of duty paid on imports since the effective date of the TCO, which is the date the application was lodged. The instrument ensures that no existing rights or liabilities are adversely affected by its implementation.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which are applicable to goods that are subject to a lower rate of customs duty. The legislation applies to entities or individuals seeking tariff concessions for certain goods that are not produced in Australia in the ordinary course of business, thereby ensuring that local industries are not unfairly disadvantaged. The Act extends its application nationally, as it falls under the Commonwealth jurisdiction, and allows the Chief Executive Officer of Customs to make written orders specifying the goods eligible for the tariff concession. The Act excludes goods specified under section 269SJ from being subject to a TCO. Additionally, the legislation allows for the application to be extended or restricted through subordinate instruments, facilitating adaptability to specific industry needs or changes in market conditions. The rights of importers are positively affected by these concessions, as they may apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force, without any imposition of new liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269B, 269D, 269E, 269P, and 269S) establish the framework for the application and assessment of Tariff Concession Orders (TCOs). Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods. The CEO must then assess whether the application meets the core criteria (section 269C), which requires that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. If the CEO determines that the application meets these criteria, they must make a TCO (section 269P(3)), declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. The TCO is deemed to come into effect on the date the application was lodged (subsection 269S(1)), meaning that the tariff concession applies retroactively from that date.
The obligations imposed by this Act on the parties involved primarily concern the application process and the CEO’s responsibilities. The applicant must ensure that their application is made in accordance with the provisions of section 269F and that it complies with the core criteria outlined in sections 269C, 269B, 269D, and 269E. The CEO is required to assess the application and, if satisfied that the core criteria are met, to make a written TCO. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting any person who believes the TCO should not be made to lodge a submission. If no submissions are received, the TCO can proceed.
Failure to comply with the requirements of this legislation can result in various consequences. Although the specific offences and penalties are not detailed within the explanatory statement, breaches of customs regulations generally can lead to civil or criminal penalties under the Customs Act 1901 and associated regulations. For instance, knowingly or recklessly making a false statement or representation can attract penalties of up to $22,200 for individuals or significantly higher for corporations, depending on the severity and intent of the breach. Additionally, any person adversely affected by a TCO may have recourse to legal remedies, such as challenging the validity of the TCO in court.