EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703744
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 plastic bag making machines on 08 March 2007.
Instrument
TCO No 0703744 was made on 25 May 2007. It declares that those certain plastic bag making machines 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. 0703744
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 Tariff Concession Instrument No. 0703744 was introduced in 2007 under the Customs Act 1901 to provide a concession on the duty payable on certain goods, specifically plastic bag making machines, by granting a Tariff Concession Order (TCO). This instrument was enacted by the Chief Executive Officer of Customs, who is responsible for administering the Act. The purpose of the TCO is to reduce the customs duty on specific imported goods, thereby addressing the economic gap by providing tariff relief, provided that no substitutable goods are produced in Australia at the time of application. The legislative framework ensures that the concession does not disadvantage any existing rights or impose new liabilities on individuals, thereby maintaining a balance between providing economic relief and protecting vested interests.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0703744, applies to the application process for Tariff Concession Orders (TCO) for certain goods, specifically those that are subject to a concessionary rate of customs duty. The Act enables the Chief Executive Officer of Customs to grant a TCO to an applicant if certain criteria are met, including the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO applies to the specific goods identified in the instrument, which, in this case, are certain plastic bag making machines, and is effective from the date the application was lodged. The geographic scope of the Act is national, as it is a Commonwealth Act, thereby applying across Australia. However, it is noted that the Act does not disadvantage any person, including importers, who had rights as at the date of registration, and importantly, it does not impose any new liabilities on any person. The application of the Act can be further extended or specified through subordinate instruments, although in this instance, no such extensions or restrictions are noted.
Key Provisions
The Customs Act 1901 provides a framework for the administration of customs duties, and under section 269F, allows for the application of Tariff Concession Orders (TCOs) to certain goods. Section 269C stipulates that for a TCO application to meet the core criteria, it must be the case that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This requirement is crucial in determining whether the goods in question are suitable for a concession.
Under the Act, obligations fall on both the Chief Executive Officer of Customs (CEO) and applicants. The CEO must decide whether an application meets the core criteria and, if satisfied, must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. The applicant must ensure that their application complies with the conditions set out in the Act, such as ensuring that the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO.
Breach of the requirements set out in the Customs Act 1901 can result in penalties. Under section 269K of the Act, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why a TCO should not be made. Failure to comply with this notice can result in a breach of the Act, which may lead to enforcement actions. Additionally, any person who knowingly makes a false or misleading statement in an application for a TCO can face criminal charges and penalties, which may include fines up to the maximum prescribed by law.
In summary, the Customs Act 1901 outlines the process for applying for and granting TCOs, with specific requirements and obligations for both applicants and the CEO. Non-compliance with the Act can result in criminal charges and penalties, underscoring the importance of adhering to the prescribed procedures.