EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704650
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.
Polystrom Plastics Pty Limited applied for a TCO in respect of certain extrusion lines on 02 April 2007.
Instrument
TCO No 0704650 was made on 22 June 2007. It declares that those certain extrusion lines 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. 0704650 is taken to have come into force on 02 April 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, serves as the foundational legislation governing customs and border control in Australia. It establishes a framework for administering customs duties, controlling the importation and exportation of goods, and preventing illegal trade activities. The Act was introduced to address the need for a comprehensive and structured approach to managing customs and trade regulations within the country. The Tariff Concession Instrument No. 0704650, issued under the Customs Act, provides a mechanism for granting tariff concessions to specific goods, thereby offering relief on customs duties. This particular instrument was introduced to address a gap in the application process for tariff concessions by providing clear criteria and procedural guidelines for applicants and the Chief Executive Officer of Customs in determining the eligibility of goods for tariff concessions. The policy objective is to facilitate smoother trade operations by reducing the duty burden on eligible imported goods, thereby supporting economic efficiency and competitiveness in the market.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, designed to lower customs duty rates on specified goods. This provision applies to any individual or entity, such as Polystrom Plastics Pty Limited, that applies for a TCO for goods that are not specified in section 269SJ of the Act, which outlines goods ineligible for TCOs. The application must meet the core criteria outlined in section 269C, which includes the absence of substitutable goods produced in Australia at the time of application. The TCO’s jurisdiction spans the entirety of Australia and operates under the national customs tariff system, as it references Schedule 4 of the Customs Tariff Act 1995. Any exclusions or exemptions from the TCO are strictly defined within the Act, particularly in sections 269SJ and 269C. The TCO’s application may be further defined or restricted through subordinate instruments, which may provide additional criteria or conditions for the concession’s applicability.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0704650 under the Customs Act 1901 (the Act) establish the framework for the creation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P(3)). Section 269F allows an application to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods. If the CEO determines that the application is valid and meets the core criteria set out in section 269C, a written order declaring the goods eligible for a tariff concession is issued. This process is subject to the condition in section 269SJ that certain goods cannot be subject to a TCO. In this case, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0704650 for certain extrusion lines.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to assess applications against the core criteria and ensure that no substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions if there are reasons why the TCO should not be made (subsection 269K(1)). Once a TCO is made, it applies retroactively to the date the application was lodged (subsection 269S(1)). The TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person (subsection 269S(1)).
Breaching the provisions of the Customs Act 1901 can result in both civil and criminal consequences. Civil penalties may include fines and other monetary penalties as stipulated in the relevant sections of the Act and associated regulations. Criminal penalties, which are more severe, can include imprisonment and additional fines, depending on the nature and severity of the breach. The specific maximum penalties are not detailed in the explanatory statement but would be found in the relevant sections of the Customs Act 1901 and the Customs Regulations 1994. The consequences are designed to enforce compliance and maintain the integrity of the customs duty system.