EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711275
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.
VIP Plastic Packaging Pty Ltd applied for a TCO in respect of certain blow moulding machines on 12 July 2007.
Instrument
TCO No 0711275 was made on 02 October 2007. It declares that those certain blow moulding machines 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. 0711275 is taken to have come into force on 12 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 Customs Act 1901, enacted by the Australian Parliament, established a framework for customs duty administration, including provisions for Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0711275, introduced to address the need for tariff concessions on certain imported goods, was made under the authority of the Customs Act. This legislative instrument was designed to provide relief by lowering or eliminating customs duties on specified goods, in this case, certain blow moulding machines, to support economic efficiency and competitiveness. The instrument was introduced after VIP Plastic Packaging Pty Ltd applied for a TCO on 12 July 2007, and it came into force on the same date. The policy objective was to ensure that the application of these tariff concessions would not disadvantage any person and would allow for potential duty refunds for importers of the affected goods.
Scope and Application
The Tariff Concession Instrument No. 0711275 applies to certain blow moulding machines that are subject to a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901. This instrument was made in response to an application by VIP Plastic Packaging Pty Ltd and is directed towards the reduction of customs duty on specified goods, in this case, certain blow moulding machines. The application of the Act extends to any individual or entity seeking a tariff concession on goods that meet the specified criteria, ensuring that the machinery in question is not substitutable by goods produced in Australia. The geographic scope of this legislation is national, as it pertains to the application of customs duties across Australia.
The Act is subject to certain exclusions, notably those specified in section 269SJ of the Customs Act 1901, which identifies goods that cannot be the subject of a TCO. The application of the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, except the Commonwealth. This TCO came into force on 12 July 2007, the date on which the application was lodged, and the concession applies retroactively to that date. The application process and the terms of the TCO are further governed by the Customs Regulations 1996, which provide for the refund of duty on goods imported since the TCO's effective date.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0711275 under the Customs Act 1901 (section 269P) involve the establishment of a tariff concession order (TCO) for specific goods. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application meets the core criteria outlined in sections 269C and 269B, the CEO must make a written order declaring that the goods in question are subject to a lower rate of customs duty. Specifically, in this instance, the TCO applies to certain blow moulding machines, which are now subject to a duty rate of free, as opposed to the general rate of 5% (section 269P(3)). The CEO was satisfied that no substitutable goods were produced in Australia on the day the application was lodged, which is a core criterion for granting the concession (section 269C). The TCO was published in the Gazette with an invitation for objections, none of which were received (subsection 269K(1)).
The obligations imposed by this Act on the parties involved primarily revolve around the application process and the conditions for granting a TCO. The applicant must ensure that their application meets the core criteria, which includes proving that no substitutable goods were produced in Australia at the time of application. The CEO of Customs has the obligation to review the application, determine if the core criteria are met, and if so, issue a written order. Additionally, the CEO must publish a notice in the Gazette inviting objections to the TCO, as mandated by subsection 269K(1). These obligations are essential to ensure that the tariff concession process is transparent and that all stakeholders have the opportunity to be heard.
Breach of the conditions for granting a TCO or misrepresentation in an application may have legal consequences. While the explanatory statement does not detail specific offences or penalties for non-compliance, the Customs Act 1901 likely encompasses general provisions for penalties related to false statements or misrepresentations made in applications. Penalties for such breaches can include fines or imprisonment, as stipulated under other relevant sections of the Customs Act 1901. The exact penalties would depend on the severity of the misrepresentation and the discretion of the court. Importantly, the TCO itself does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth, as per the relevant subsections.