EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703448
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.
Imexco Australia Pty Ltd applied for a TCO in respect of certain plastic raised poultry flooring panels on 05 March 2007.
Instrument
TCO No 0703448 was made on 25 May 2007. It declares that those certain plastic raised poultry flooring panels 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. 0703448 is taken to have come into force on 05 March 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). The purpose of this legislation is to allow for a lower rate of customs duty on certain goods, facilitating trade by reducing financial burdens on importers. TCOs are applied to goods where no substitutable products are produced in Australia, ensuring that the local industry is not unfairly disadvantaged while promoting economic efficiency by allowing cheaper imports. The explanatory statement outlines how Imexco Australia Pty Ltd successfully applied for a TCO concerning specific plastic raised poultry flooring panels, resulting in these goods being subject to a zero rate of duty, effective from the date of the application. This process underscores the policy objective of supporting trade while safeguarding domestic production where applicable.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 0703448, applies to entities and individuals seeking tariff concessions on certain goods. Specifically, this legislation pertains to the application process for Tariff Concession Orders (TCOs) which, if granted, allow for a reduction in customs duty for specified goods. The application process is initiated under section 269F of the Act, where a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of particular goods. The CEO evaluates whether the application meets the core criteria set out in the Act, notably that no substitutable goods are produced in Australia in the ordinary course of business, as outlined in sections 269C and 269S of the Act. This instrument applies nationally across Australia, as it is a Commonwealth Act, and its reach is limited to the goods specified in the application and subsequent order. Exclusions under section 269SJ of the Act ensure that certain goods, such as those that could potentially harm the Australian industry or public health, are not eligible for a TCO. The instrument also specifies that the tariff concession does not affect pre-existing rights or liabilities of any person except the Commonwealth, ensuring that the rights of importers are protected, and no new liabilities are imposed.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269K, 269P, 269S, and 269SJ (referred to as section 269C, section 269F, etc., in this explanation). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, the CEO must determine if it meets the core criteria in section 269C. If the core criteria are satisfied, the CEO must issue a written order (the TCO) stating that the goods are subject to a prescribed tariff item, as outlined in section 269P. Section 269K requires the CEO to publish a notice in the Gazette after accepting a TCO application, inviting submissions from any person who believes the TCO should not be made. Section 269S specifies that a TCO is effective from the date the application is lodged.
The Customs Act 1901 imposes several obligations and requirements on the parties involved in the TCO process. The CEO must assess whether an application meets the core criteria and decide whether to issue a TCO. If the core criteria are met, the CEO must issue the TCO, specifying the tariff item applicable to the goods. The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting submissions from any person who might oppose the TCO. The applicant must ensure that the goods for which they are applying for a TCO do not fall under the restricted category listed in section 269SJ.
Breaches of the provisions under the Customs Act 1901 may lead to various civil or criminal consequences. While the explanatory statement does not explicitly state the offences, penalties, or consequences for breaches, it is reasonable to infer that any improper application or fraudulent use of a TCO could result in penalties under the Customs Act 1901 or other relevant legislation. The penalties for breaches of the Customs Act 1901 can include fines and imprisonment, with the exact penalties depending on the nature and severity of the offence. For example, section 238 of the Customs Act 1901 provides for penalties for offences related to the importation or exportation of goods, including fines up to $100,000 or imprisonment for up to 10 years, or both, for serious offences. The exact penalties for breaches in the context of TCOs would depend on the specific circumstances and the relevant provisions of the Act.