EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701869
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.
Innovia Films (Asia Pacific) Pty Ltd applied for a TCO in respect of certain plastic film cutters and rewinders on 05 February 2007.
Instrument
TCO No 0701869 was made on 30 April 2007. It declares that those certain plastic film cutters and rewinders 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. 0701869 is taken to have come into force on 05 February 2007.
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 Tariff Concession Instrument No. 0701869, enacted in 2007, is an amendment to the Customs Act 1901 designed to address the issue of tariff concessions for specific goods. The Customs Act 1901 establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs, effectively reducing customs duty rates on certain goods. This legislation aims to ensure that no substitutable goods are produced in Australia at the time of the application, thereby providing a tariff concession where appropriate. The instrument was enacted by the Parliament of Australia with the policy objective of facilitating trade by offering reduced duty rates, which in turn can enhance the competitiveness of Australian industries by lowering the cost of imported goods essential for production. This approach is intended to benefit importers by potentially allowing them to apply for refunds of duty on goods imported since the TCO was deemed to come into force.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the application of tariff concession orders (TCO) which lower the rate of customs duty on certain goods. These orders are applicable to goods that meet the core criteria set forth in the Act, specifically where no substitutable goods are produced in Australia in the ordinary course of business. The application for a TCO is submitted to the Chief Executive Officer of Customs (CEO), who must ensure that the application does not pertain to goods that are expressly excluded under section 269SJ of the Act. Once the CEO determines that the application meets the criteria, they issue a written order specifying the goods and the applicable customs duty rate. The process includes an opportunity for public consultation, although in this instance, no submissions were received. The instrument, Tariff Concession Instrument No. 0701869, was made on 30 April 2007, concerning certain plastic film cutters and rewinders, declaring them eligible for a zero duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, which generally applies a 5% duty. The TCO ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the date the TCO came into effect, without imposing any new liabilities on other parties.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0701869 (TCO No. 0701869) under the Customs Act 1901 (section 269P(3)) declare that certain plastic film cutters and rewinders are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This designation means that these goods are subject to a zero rate of duty instead of the general rate of 5%. The instrument was issued following an application by Innovia Films (Asia Pacific) Pty Ltd, which was considered valid by the Chief Executive Officer of Customs (CEO) under section 269C. The CEO determined that the application met the core criteria as no substitutable goods were produced in Australia at the time the application was lodged (section 269SJ).
The Act imposes specific obligations on the CEO regarding the consideration and processing of TCO applications. Upon receiving an application, the CEO must ensure it is not in respect of goods specified in section 269SJ of the Act. If the application is valid, the CEO must determine whether it meets the core criteria outlined in section 269C, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged (section 269D and 269E). Furthermore, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received, leading to the issuance of the TCO.
Breach of the requirements under the Customs Act 1901 can result in significant legal consequences. Section 274 of the Act provides for penalties in cases of non-compliance with the customs laws, which can include both civil and criminal penalties. For instance, knowingly importing goods that do not comply with the customs regulations could result in a fine or imprisonment. The maximum penalties are set out in the Crimes Act 1914 and can vary based on the severity and intent behind the breach. The Act also includes provisions for the seizure of non-compliant goods and potential refunds or restitutions for affected parties. The rights of importers are protected, and any imposition of liabilities is strictly avoided as per section 269S(1).