EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708765
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.
Philip Morris Limited applied for a TCO in respect of certain tobacco processing product transfer conveyors on 08 June 2007.
Instrument
TCO No 0708765 was made on 20 August 2007. It declares that those certain tobacco processing product transfer conveyors 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. 0708765 is taken to have come into force on 08 June 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. 0708765, made under the Customs Act 1901, was enacted in 2007 to address the need for tariff concessions for specific goods not produced domestically, thereby providing economic benefits to importers of these goods. This legislative instrument was introduced to facilitate the reduction or exemption of customs duties on particular imported goods, in this case, certain tobacco processing product transfer conveyors, provided no substitutable goods are produced in Australia. The policy objective, as articulated in the explanatory statement, is to support the importation of goods that cannot be domestically produced by offering tariff concessions, thereby enhancing the competitiveness and efficiency of the importing businesses. The instrument was created by the Chief Executive Officer of Customs following a valid application by Philip Morris Limited and came into force on the date the application was lodged, 08 June 2007. The instrument does not affect the rights of any person as at the date of registration and does not impose any liabilities.
Scope and Application
The Customs Act 1901, through the Tariff Concession Instrument No. 0708765, facilitates the application of tariff concessions on certain goods, such as tobacco processing product transfer conveyors, which are identified through Tariff Concession Orders (TCOs) issued by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods that qualify under the scheme by demonstrating that no substitutable goods are produced in Australia, thereby meeting the core criteria set out in the Act. The geographic reach of this legislation is national, as it operates under the authority of the Commonwealth of Australia, impacting entities involved in the importation of specified goods across the country. Notably, the Act excludes certain goods from the application of a TCO, as outlined in section 269SJ, and the process involves public consultation as mandated by subsection 269K(1). The commencement of a TCO is effective from the date the application is lodged, as per subsection 269S(1), ensuring that any relevant rights and liabilities are managed according to the timing of the application and order issuance.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0708765 under the Customs Act 1901 include section 269F, which allows a person to apply for a Tariff Concession Order (TCO) from the Chief Executive Officer (CEO) of Customs (section 269F). Section 269C stipulates that the CEO must ensure the application meets core criteria, specifically that no substitutable goods were produced in Australia at the time of the application (section 269C). Once the CEO is satisfied, a written order is made under section 269P(3) declaring the goods eligible for the concession. The application in this case relates to certain tobacco processing product transfer conveyors, which are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, granting them a duty-free status.
The obligations and requirements imposed by this Act on the parties include the need for the applicant to demonstrate that no substitutable goods were produced in Australia at the time of the application. This involves providing evidence that the goods in question are not being produced domestically in a way that would make the concession unnecessary. Additionally, the CEO must ensure the application meets the specified criteria and make a decision within the legal framework. The CEO is also required to publish a notice in the Gazette (subsection 269K(1)) to allow any interested parties to lodge submissions if they believe the TCO should not be granted. In this instance, no submissions were received, indicating no objections to the concession.
Breaches of the provisions in the Customs Act 1901 can result in various penalties and consequences. For instance, providing false information in an application or making a fraudulent claim for a tariff concession could lead to criminal charges under section 272 of the Act, which carries a maximum penalty of 200 penalty units or imprisonment for five years, or both. Furthermore, if an entity knowingly or negligently contravenes the Act, they could face civil penalties. These can include fines of up to 10,000 penalty units for a body corporate, as outlined in section 276 of the Act. Additionally, the CEO has the authority to recover any unlawful benefit received under section 283, ensuring compliance with the legislative intent.