EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703463
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.
Halifax Vogel Group Pty Ltd applied for a TCO in respect of certain sheets and/or films on 5 March 2007.
Instrument
TCO No 0703463 was made on 25 May 2007. It declares that those certain sheets and/or films 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 0%.
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. 0703463 is taken to have come into force on 5 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, provides a framework for the administration of customs and excise duties in Australia. Part XVA of this Act facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty rates for specified goods. This legislative framework was introduced to address the need for tariff adjustments that could support specific economic activities or industries by reducing the cost burden of customs duties on imported goods. Instrument No. 0703463, made under the Customs Act 1901, concerns a Tariff Concession Order for certain sheets and/or films, effectively reducing the duty rate from 5% to 0%. The order was made after it was determined that no substitutable goods were produced in Australia, aligning with the criteria outlined in section 269C of the Act. The objective of this instrument is to provide a tariff concession that benefits importers of these specific goods.
Scope and Application
The Customs Act 1901 applies to the concession of customs duty on certain goods via Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs under section 269F of the Act. This process is available to any person who applies for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act as ineligible for TCOs. The Act applies nationally across Australia and is administered by the Commonwealth. The TCO mechanism is designed to benefit importers by potentially reducing the duty on specific goods if certain criteria are met, namely, if no substitutable goods are produced in Australia as per sections 269C and 269D of the Act. The instrument, Tariff Concession Instrument No. 0703463, specifically applies to certain sheets and films, reducing the duty from 5% to 0%, as the CEO was satisfied that no substitutable goods were produced domestically. This TCO, which came into effect on 5 March 2007, does not affect any rights or liabilities of persons other than the Commonwealth in relation to actions taken before its registration. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received.
Key Provisions
The main operative sections of this legislation pertain to the process and criteria for making Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269F, and 269P(3)). Section 269F allows for the application for a TCO, while section 269C specifies that the application must meet core criteria, namely that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, a TCO must be issued under section 269P(3). This TCO specifies that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thereby applying a reduced rate of customs duty.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the TCO application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as required by section 269K(1). If no submissions are received, the CEO can proceed to issue the TCO. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration of the TCO, as outlined in section 269S(1).
There are no explicit offences or penalties mentioned in the explanatory statement for the failure to comply with the requirements of the Act or for breaching a TCO. However, the Customs Act 1901 and associated regulations do contain provisions for offences and penalties related to customs duty evasion and other customs-related offences. These provisions may apply to any breaches of the TCO or the Customs Act 1901, although specific penalties are not detailed in this explanatory statement. Importers of the goods affected by the TCO may apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
This legislation ensures that the process for granting tariff concessions is transparent and fair, while also protecting the rights of importers and ensuring that no person is disadvantaged by the issuance of a TCO. The CEO’s role is central in ensuring that the criteria for issuing a TCO are met and that any objections to the TCO are considered before it is issued. The rights of importers are safeguarded, and the legislation ensures that the TCO does not impose any liabilities on any person in respect of actions taken before the TCO came into force.