EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619302
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.
Auscap Pty Ltd applied for a TCO in respect of certain low density polyethylene tape on 04 December 2006.
Instrument
TCO No 0619302 was made on 02 March 2007. It declares that those certain low density polyethylene tape 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. 0619302 is taken to have come into force on 04 December 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise duties in Australia. One aspect of this framework is the ability to grant tariff concessions on certain goods through the issuance of Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0619302 was introduced to address a specific need for tariff relief on certain low density polyethylene tape, as requested by Auscap Pty Ltd. The problem this legislation aimed to address was the lack of domestically produced substitutes for these specific goods, thereby justifying a tariff concession under the Act. The policy objective outlined in the Act is to facilitate the import of goods that are not produced domestically, thereby encouraging trade and economic activity without imposing undue burdens on domestic producers.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking to import goods that may benefit from tariff concessions, provided these goods are not specified in section 269SJ of the Act as those ineligible for TCOs. The application process involves an assessment by the CEO to determine if the core criteria, as outlined in section 269C, are met, such as ensuring that no substitutable goods are produced in Australia on the date the application was lodged. The geographic reach of this Act is national, governing all imports into Australia. The Act allows for the creation of TCOs through subordinate instruments, which can alter the application and scope of the primary legislation. Notably, the Act does not disadvantage existing rights of individuals or entities and does not impose new liabilities for actions taken before the TCO's effective date.
Key Provisions
The Customs Act 1901, through Tariff Concession Orders (TCOs), facilitates tariff concessions for certain goods, with Section 269F allowing applications for such concessions from interested parties. Once an application is deemed valid and does not pertain to goods listed in Section 269SJ, the Chief Executive Officer of Customs (CEO) evaluates it against the core criteria outlined in Section 269C. If satisfied that the application meets these criteria, the CEO is mandated to issue a TCO, as stipulated in Section 269P(3), effectively reducing the customs duty on the specified goods. For instance, Auscap Pty Ltd successfully obtained a TCO for low-density polyethylene tape, with the duty rate dropping from 5% to free, under the provisions of Schedule 4, item 50 of the Customs Tariff Act 1995.
Entities applying for a TCO must ensure that their application aligns with the core criteria, specifically that no substitutable goods are produced in Australia as per Section 269C. This requirement is further detailed in Sections 269D, 269E, and 269F, which define terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". The CEO is also obligated to publish a notice in the Gazette under Subsection 269K(1), inviting submissions from any interested parties who may have objections to the concession being granted. In the case of TCO No. 0619302, no objections were lodged, allowing the order to proceed without further impediment.
The commencement of a TCO is effective from the date the application is lodged, as per Subsection 269S(1), meaning that TCO No. 0619302 took effect from 4 December 2006. Importantly, the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth in respect of actions taken prior to the registration date. This ensures that while the rights of importers are positively affected, allowing them to apply for duty refunds from the effective date, no pre-existing obligations or liabilities are altered.
Failure to comply with the conditions set out in the Customs Act 1901 or to adhere to the requirements of a TCO can result in various legal consequences. Although specific offences and penalties are not detailed within the explanatory statement for TCO No. 0619302, general provisions in the Customs Act 1901 provide for both civil and criminal penalties for breaches. These can include fines and imprisonment, depending on the severity and intent behind the breach, reflecting the importance of adhering to the regulatory framework governing customs and tariff concessions.