EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703743
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.
Poly Pacific Pty Ltd applied for a TCO in respect of certain palletisers on 08 March 2007.
Instrument
TCO No 0703743 was made on 25 May 2007. It declares that those certain palletisers 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. 0703743 is taken to have come into force on 08 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 Commonwealth Parliament, established a framework for the imposition of customs duties on imported goods. This framework includes provisions for Tariff Concession Orders (TCOs) under Part XVA of the Act, which allow for the reduction of customs duties on certain goods under specific conditions. The Act was introduced to address the need for flexibility in customs duty rates to support economic and trade policies, particularly in relation to goods where local production alternatives are not viable. The policy objective behind TCOs is to provide tariff relief on goods that are not produced in Australia, thereby promoting competitiveness and supporting the import of these goods.
The Tariff Concession Instrument No. 0703743, made under the authority of the Customs Act 1901, exemplifies this approach. In this instance, Poly Pacific Pty Ltd applied for a TCO concerning certain palletisers on 8 March 2007, which was granted by the Chief Executive Officer of Customs on 25 May 2007. The instrument declared that the palletisers would be subject to a duty rate of free, down from the general rate of 5%, as no substitutable goods were produced in Australia. The instrument took effect from the date of the application, 8 March 2007, and did not disadvantage existing rights or impose new liabilities on any parties.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders are applicable to goods for which a lower rate of customs duty is prescribed. The Act allows any person to apply to the CEO for a TCO if the goods in question are not those specified in section 269SJ, which outlines the goods that are ineligible for tariff concessions. The CEO must then determine if the application meets the core criteria, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are satisfied, the CEO issues a written order, making the goods subject to a reduced rate of duty as specified in Schedule 4 to the Customs Tariff Act 1995. The CEO is mandated to publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the making of the TCO. In this case, no submissions were received. The TCO applies retroactively to the date of the application, benefiting importers who can apply for a refund of duty on goods imported since that date, without imposing any new liabilities on any person.
Key Provisions
The key sections of the Customs Act 1901 (the Act) involved in this Tariff Concession Order (TCO) are sections 269C, 269F, 269K, 269P, and 269S. Section 269F allows an application for a TCO to be made to the Chief Executive Officer of Customs (the CEO) if certain criteria are met. Section 269C requires the CEO to assess whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (section 269D and 269E). If the application meets these criteria, the CEO must make a written order declaring the goods to which the TCO applies (section 269P(3)). The TCO in question, No. 0703743, was made on 25 May 2007 and it declares that certain palletisers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269K mandates that the CEO must publish a notice in the Gazette inviting submissions on the TCO application, though no submissions were received in this case.
The Act imposes specific obligations on the CEO when handling a TCO application. Firstly, the CEO must determine whether the application is valid and not for goods specified in section 269SJ of the Act, which cannot be subject to a TCO. If the application is valid, the CEO must then assess if it meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the date the application was lodged. If these criteria are met, the CEO is required to make a written TCO order. Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on why the TCO should not be made. In this instance, the CEO did not receive any submissions.
Breaching the conditions set forth by the Customs Act 1901 may lead to various civil or criminal consequences. While the specific offences and penalties are not detailed in the text, generally, under Australian law, non-compliance with customs regulations can result in significant penalties. These may include fines and, in severe cases, imprisonment. The penalties can vary widely depending on the nature and severity of the breach. For instance, knowingly making false statements or providing misleading information in a TCO application could lead to criminal charges and substantial fines. Moreover, any party found to be in non-compliance with the terms of a TCO may face additional administrative penalties or be required to pay back any undue duty concessions received. The exact penalties would be determined based on the specific circumstances and the severity of the breach.