EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618077
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 high density polyethylene (HDPE) extruders on 01 November 2006.
Instrument
TCO No 0618077 was made on 30 January 2007. It declares that those certain high density polyethylene (HDPE) extruders 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. 0618077 is taken to have come into force on 01 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 to provide for the regulation of the importation and exportation of goods, including the imposition and collection of duties and taxes. The Tariff Concession Instrument No. 0618077, introduced in 2007, addresses the specific need to provide tariff concessions for certain goods that do not have substitutable domestic production. This instrument was enacted by the Australian Parliament and aims to facilitate trade by reducing customs duty on goods that are not produced in Australia, thereby making imported goods more competitive and accessible. The instrument was developed in response to an application by Hester Holdings Pty Ltd for tariff concessions on high-density polyethylene (HDPE) extruders, where it was determined that no substitutable goods were produced in Australia, thus meeting the core criteria for concession under section 269C of the Act. The policy objective is to support industries that rely on imported goods by reducing their costs through tariff concessions.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0618077, provides a framework for the application of tariff concessions on specific goods, in this case certain high density polyethylene (HDPE) extruders. This legislation applies to entities seeking a reduction in customs duty on goods imported into Australia by ensuring that such reductions are only granted if no substitutable goods are produced in Australia. The act mandates that the Chief Executive Officer of Customs must determine whether an application for a Tariff Concession Order (TCO) meets the criteria set forth in the Act, specifically that no substitutable goods are produced domestically in the ordinary course of business. This concession, effective from the date of the application on 01 November 2006, lowers the duty rate on the specified HDPE extruders from the general rate of 5% to free, benefiting importers who can apply for a refund of duty on goods imported since the commencement of the TCO. The application of this legislation is national, applying across all states and territories of Australia, and it does not disadvantage any person other than the Commonwealth or impose liabilities on any person.
Key Provisions
The primary operative sections of this legislation, specifically section 269C and section 269P(3) of the Customs Act 1901, outline the process by which a Tariff Concession Order (TCO) can be granted by the Chief Executive Officer (CEO) of Customs. According to section 269C, an application for a TCO will be considered if, on the date the application is lodged, no substitutable goods are being produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets this core criterion, section 269P(3) mandates that a written order (the TCO) must be made, declaring the goods in question to be subject to a prescribed tariff item. This effectively reduces the customs duty on the specified goods.
Entities or individuals seeking a TCO must meet several obligations as stipulated in the Act. Firstly, the applicant must ensure that the goods in question are not substitutable by any goods produced in Australia at the time the application is lodged. The CEO is responsible for verifying this by examining whether there are any goods produced in Australia that can be used interchangeably with the goods specified in the TCO application. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted. The absence of any submissions suggests that no objections were raised against the application.
Breaching the requirements of the Customs Act 1901 can lead to various legal consequences. Although the explanatory statement does not explicitly mention offences or penalties, the Act generally includes provisions for both civil and criminal penalties for non-compliance with customs regulations. Typically, these could range from fines to imprisonment, depending on the severity of the breach. For instance, providing false information in an application or engaging in fraudulent activities to secure a TCO could result in significant penalties. The exact penalties would depend on the specific breach and relevant laws governing customs and trade.
The Tariff Concession Order No. 0618077, which was made on 30 January 2007, is an example of how these provisions are applied. The order pertains to certain high-density polyethylene (HDPE) extruders, specifying that they are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the duty rate reduced to free. This order came into effect on the date the application was lodged, 01 November 2006, and does not affect the rights of any person other than the Commonwealth, ensuring that no existing liabilities or disadvantages are imposed on other parties. Importers of these goods can benefit from this concession by applying for a refund of duty on goods imported since the TCO's effective date.