EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704422
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.
Yatala Plastics Pty Ltd applied for a TCO in respect of certain corrugated plastic pipe mould blocks on 26 March 2007.
Instrument
TCO No 0704422 was made on 15 June 2007. It declares that those certain corrugated plastic pipe mould blocks 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. 0704422 is taken to have come into force on 26 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. 0704422, enacted in 2007, addresses the need for tariff concessions on specific imported goods as outlined under the Customs Act 1901. This instrument was introduced to provide relief on the duty rates for certain goods, ensuring that Australian businesses can compete effectively in the global market without being burdened by high customs duties on essential inputs. The instrument was made under the authority of the Chief Executive Officer of Customs, who, upon determining that no substitutable goods were produced in Australia, granted the tariff concession for the corrugated plastic pipe mould blocks. This action aligns with the policy objective of supporting Australian industries by reducing costs associated with importing necessary materials, thereby fostering economic efficiency and competitiveness.
The instrument was subject to a consultation period as required by the Customs Act 1901, although no submissions opposing the tariff concession were received. The tariff concession order came into force on the date the application was lodged, ensuring that the benefits are retroactively applied to imports since that date, thereby providing relief to importers without imposing any new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which lower the rate of customs duty on certain goods. This legislative framework applies to individuals or entities that seek to import goods eligible for tariff concessions, provided these goods are not specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. The Act operates within the Commonwealth jurisdiction, impacting all importers and exporters within Australia. It is important to note that the CEO must ensure no substitutable goods are produced in Australia before issuing a TCO, as outlined in section 269C of the Act. The issuance of TCOs is subject to the CEO's satisfaction that the application meets the core criteria, and it extends to the specific goods mentioned in the application, with no adverse impact on the rights of non-Commonwealth persons as per the Act. The commencement of a TCO aligns with the date the application is lodged, and it does not retroactively impose any liabilities.
Key Provisions
The Tariff Concession Instrument No. 0704422, made under the Customs Act 1901 (the Act), pertains specifically to Tariff Concession Orders (TCOs) for certain corrugated plastic pipe mould blocks (section 269P(3)). The instrument was registered on 15 June 2007, following an application by Yatala Plastics Pty Ltd on 26 March 2007. The primary operative sections of this instrument are sections 269C, 269B, and 269D of the Act, which outline the core criteria that must be met for a TCO to be granted. These sections require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO 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 Tariff), which for these goods is item 50, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes certain obligations on the parties involved. Firstly, it mandates that the CEO must ensure that the application does not pertain to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application meets the core criteria, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit any reasons why the TCO should not be made. In this case, the CEO did not receive any submissions. Additionally, the Act specifies that the TCO will come into force on the day the application was lodged, in this instance, 26 March 2007.
The instrument also delineates the consequences for non-compliance. Although specific penalties are not detailed in the text, the Act generally outlines both civil and criminal penalties for breaches of its provisions. Civil penalties may include fines, while criminal penalties could involve imprisonment, reflecting the seriousness with which the Act treats non-compliance. The TCO itself does not impose any liabilities on any person and does not affect the rights of individuals as at the date of registration, except to beneficially affect importers who may apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.