EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710969
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.
Strap & Wrap Packaging Systems Pty Ltd applied for a TCO in respect of certain strapping machine parts on 10 July 2007.
Instrument
TCO No 0710969 was made on 02 October 2007. It declares that those certain strapping machine parts 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. 0710969 is taken to have come into force on 10 July 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. 0710969 was enacted in 2007 as part of the Customs Act 1901, aiming to provide tariff concessions for specific goods to encourage trade and economic efficiency. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to goods specified in these orders, provided certain criteria are met. The objective is to ensure that the concessions are only granted when no substitutable goods are produced in Australia, thereby supporting industries that cannot compete with locally manufactured alternatives. This legislative instrument addresses the need for flexibility in tariff rates to promote fair trade practices and economic growth.
The instrument was developed following an application by Strap & Wrap Packaging Systems Pty Ltd for tariff concessions on certain strapping machine parts, which were subsequently approved by the CEO of Customs. The application process involved publishing a notice in the Gazette to allow for public submissions, although none were received. The tariff concession came into effect on the date the application was lodged, providing immediate benefits to importers of the specified goods by potentially allowing them to claim refunds for duties paid before the concession was registered.
Scope and Application
The Tariff Concession Instrument No. 0710969 applies to the concession of customs duty on certain strapping machine parts, as determined by the Chief Executive Officer of Customs (CEO) under the Customs Act 1901. This instrument is directed at persons or entities that import these specific goods, providing them with a tariff concession that effectively reduces their customs duty rate to free. The instrument operates nationally, as it is an application of Commonwealth legislation. The instrument is effective from the date the application was lodged, which is 10 July 2007, in accordance with the provisions of the Act. The application process for such concessions requires the CEO to ensure that no substitutable goods are being produced in Australia in the ordinary course of business, and in this case, the CEO determined that no such goods existed. The instrument does not extend to any goods specified in section 269SJ of the Customs Act, which outlines goods that cannot be subject to a tariff concession order. Furthermore, the instrument does not disadvantage any person by affecting their rights as they stood on the date of registration, nor does it impose any liabilities on any person.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning goods. The CEO evaluates these applications against certain criteria before deciding whether to grant a concession. The key provision is that a TCO will only be made if the goods are not specified in section 269SJ, which lists goods ineligible for a TCO. If the CEO determines that the application meets the core criteria set out in section 269C, they must proceed to make a written order (section 269P(3)), effectively granting the tariff concession.
The obligations imposed by the Act on the parties involved are clear and straightforward. Any person who wishes to apply for a TCO must ensure their application complies with the conditions set out in section 269F. The CEO is obligated to evaluate each application against the criteria in section 269C and to make a written order if the application meets these criteria. Additionally, upon accepting an application as valid, the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be granted to submit their reasons (subsection 269K(1)). The CEO is also required to consider any submissions received and decide whether to proceed with the TCO.
Breaches of the provisions under the Customs Act 1901 can result in serious consequences. Although the explanatory statement does not specify offences or penalties related to the TCO process, general provisions of the Customs Act outline penalties for non-compliance. These penalties can include fines and imprisonment, depending on the severity of the offence. For example, under section 233D, a person found guilty of an offence related to the importation of dutiable goods can be fined up to 10,000 penalty units or imprisoned for up to 10 years, or both. Similarly, subsection 233D(2) provides for additional penalties for aggravated offences, which can escalate the fines and imprisonment terms significantly.