EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618621
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.
Economous Australia applied for a TCO in respect of certain plastic seal lathes on 17 November 2006.
Instrument
TCO No 0618621 was made on 09 February 2007. It declares that those certain plastic seal lathes 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. 0618621 is taken to have come into force on 17 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, enacted by the Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) can be issued to provide tariff concessions on certain goods. The Act aims to streamline the process for reducing customs duties on goods where no substitutable goods are produced in Australia. Tariff Concession Instrument No. 0618621, made in 2007, addresses the need for tariff concessions on specific plastic seal lathes by applying a concessional rate of duty, effectively reducing the general duty rate of 5% to free. This instrument was introduced following an application by Economes Australia and subsequent approval by the Chief Executive Officer of Customs, who found that the application met the core criteria outlined in the Act, particularly that no substitutable goods were produced domestically. The policy objective is to support importers by allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0618621, under Part XVA of the Customs Act 1901, applies to the concession of customs duty for specific goods, in this case, certain plastic seal lathes. The Act permits the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet certain criteria, including the absence of substitutable goods produced in Australia. Economous Australia's application for a TCO in respect of these plastic seal lathes was approved, resulting in the duty rate for these goods being set at free, as opposed to the general rate of 5%. This instrument ensures that the rights of persons other than the Commonwealth are not adversely affected by the concession, and it notably does not impose any liabilities on any person for actions taken prior to the TCO's effective date. The TCO's application extends across the Commonwealth of Australia, affecting the rights of importers who can now apply for a refund of duty on goods imported since the TCO's effective date, which is 17 November 2006. The CEO's decision to implement the TCO followed the absence of any submissions opposing the concession, as required by the Act.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0618621, under the Customs Act 1901, focus on the establishment of Tariff Concession Orders (TCOs) for specific goods. Section 269F allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a TCO. If the application pertains to goods not listed in section 269SJ, which specifies goods that cannot be subject to a TCO, the CEO must then determine if the application meets the core criteria (section 269C). This core criteria involves ensuring that, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business, as outlined in sections 269D, 269E, and 269P(3).
The obligations imposed by this Act on the parties involved are primarily on the CEO of Customs. The CEO must ensure that applications for TCOs are reviewed against the specified criteria. If the CEO is satisfied that an application meets the core criteria, they must make a written order (section 269P(3)) declaring the goods to which the TCO applies. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections to the TCO. In the case of TCO No. 0618621, no submissions were received in response to this invitation.
Breach of the obligations or requirements outlined in the Customs Act 1901 may result in various consequences. While specific penalties are not detailed in the explanatory statement, breaches generally may incur civil or criminal penalties under Australian law. These could include fines and, in severe cases, imprisonment, depending on the nature and severity of the breach. The exact penalties would be determined by the relevant courts and would depend on the specific circumstances of the breach. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on any person.