EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710144
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 spray cooling baths on 28 June 2007.
Instrument
TCO No 0710144 was made on 7 September 2007. It declares that those certain spray cooling baths 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 0%.
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. 0710144 is taken to have come into force on 28 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the administration of customs and excise duties, including the process for Tariff Concession Orders (TCOs). The Act aims to facilitate international trade by providing relief to businesses that import goods that are not produced in Australia, thus encouraging economic efficiency and reducing costs for importers. The Customs Act 1901 allows the Chief Executive Officer of Customs to make a TCO, reducing customs duty on specified imported goods if no substitutable goods are produced in Australia. This process was introduced to address the problem of ensuring that Australian businesses have access to competitively priced goods that are not domestically produced, thereby supporting broader economic objectives such as fostering competitive markets and enhancing consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0710144, made under section 269F of the Customs Act 1901, applies to entities that have applied for and received a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. Specifically, this instrument pertains to certain spray cooling baths that Yatala Plastics Pty Ltd applied for and received a concession on, reducing the duty rate from 5% to 0%. The Act allows for such concessions if no substitutable goods are produced in Australia in the ordinary course of business. This legislation operates on a national level across Australia, extending the benefits of reduced customs duties to qualifying imported goods. The application of this TCO does not affect the rights of any person adversely as at the date of registration and does not impose any liabilities on any person. The exemption from duty applies retroactively from the date the application was lodged, 28 June 2007, allowing for potential duty refunds for importers of the specified goods under certain conditions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0710144 (F2007L03821) pertain to the concession of customs duty for certain spray cooling baths under section 269F of the Customs Act 1901. Section 269F allows an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specified goods. If the CEO determines that the application meets the core criteria, as outlined in section 269C, a TCO is issued. Section 269P(3) mandates that the CEO must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In this instance, Instrument TCO No. 0710144, made on 7 September 2007, declares that certain spray cooling baths are subject to a 0% duty rate, down from the general rate of 5%.
The obligations imposed by the Act on the parties governed by it include the requirement for any person seeking a TCO to ensure their application meets the core criteria. Specifically, under section 269C, applicants must demonstrate that no substitutable goods were produced in Australia on the day the application was lodged. The CEO is then obligated to make a decision based on this criterion and, if satisfied, issue a TCO. Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting any interested party to submit objections to the TCO. The CEO must consider any submissions received before making the final decision.
The Act imposes certain obligations on the CEO, including the duty to evaluate the application against the core criteria and to publish a notice in the Gazette as per section 269K(1). The CEO must also ensure that no substitutable goods were produced in Australia at the time of application, as per section 269C. Should the CEO find that the application meets the core criteria, they must issue a TCO as per section 269P(3). Failure to adhere to these procedures may render the TCO invalid. The rights of importers are protected under section 126(1)(r) of the Regulations, which allows them to apply for a refund of duty on goods imported since the TCO came into force.
In terms of penalties and consequences for breach, the Customs Act 1901 does not specify particular offences related to the issuance of TCOs. However, the Act provides general penalties for breaches of customs laws, including fines and imprisonment for serious offences. For instance, under section 235 of the Act, a person who contravenes any provision of the Act may be liable for a penalty. The maximum penalties can vary significantly depending on the severity of the breach, but they can include substantial fines and imprisonment for up to two years for serious offences. The Act also provides for civil remedies, including the recovery of unpaid duties and interest. It is important for parties to comply with the obligations and requirements set forth by the Act to avoid these potential penalties and consequences.