EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721997
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.
Olex Australia Pty Ltd applied for a TCO in respect of certain plastic extrusion line on 27 December 2007.
Instrument
TCO No 0721997 was made on 14 March 2008. It declares that those certain plastic extrusion line 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. 0721997 is taken to have come into force on 27 December 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 was enacted to provide a framework for the administration of customs duties and the regulation of imports and exports in Australia. The Act was introduced to address the need for a structured approach to managing customs duties, ensuring efficient border control, and protecting domestic industries. The Parliament of Australia is the enacting body responsible for this legislation. The Customs Act 1901 includes provisions for the creation of Tariff Concession Orders (TCOs), which provide relief from customs duties for certain goods, aiming to promote fair trade practices and support specific industries. The explanatory statement for Tariff Concession Instrument No. 0721997, made under the Customs Act 1901, details the process by which Olex Australia Pty Ltd successfully applied for a TCO for certain plastic extrusion lines. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. Consequently, the goods in question were granted a tariff concession, resulting in a duty rate of free, down from the general rate of 5%. This measure is expected to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the TCO came into effect on 27 December 2007.
Scope and Application
The Customs Act 1901, as detailed in Tariff Concession Instrument No. 0721997, provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to persons or entities seeking to import goods that qualify for a lower rate of customs duty, provided these goods are not specified in section 269SJ of the Act which lists those goods that cannot be subject to a TCO. The legislation's scope includes all industries and transactions involving the importation of goods that meet the criteria for tariff concessions. The geographic reach of the Act is national, with its application extending across the Commonwealth of Australia. Any exclusions are explicitly stated in section 269SJ of the Act, which lists goods ineligible for a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments, facilitating flexibility in its implementation. The commencement of TCO No. 0721997 is effective from the date the application was lodged, in this case, 27 December 2007.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C stipulates the core criteria that an application must meet for the CEO to consider making a TCO, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P requires the CEO to make a written order declaring that the goods specified in the application are subject to a TCO, thereby applying a lower rate of customs duty.
The obligations imposed on the parties by this Act are primarily centred on the application process for a TCO. An applicant must ensure their application meets the core criteria set out in section 269C of the Act, which includes demonstrating that no substitutable goods were produced in Australia on the day the application is lodged. The CEO, upon receiving an application, has the obligation to decide whether the application meets the core criteria and to make a TCO if satisfied. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who considers there are reasons why the TCO should not be made. This consultation process ensures transparency and allows interested parties to voice their concerns.
There are no explicit offences or penalties stated in the explanatory statement for breaches of the provisions under this TCO. However, the general legal framework provided by the Customs Act 1901 and the associated regulations would apply. For instance, any failure to comply with the customs duty provisions or fraudulent claims for tariff concessions could result in civil or criminal penalties. Under the Customs Act, penalties for customs offences can include fines and imprisonment, with the exact penalties dependent on the nature and severity of the offence. For example, section 236 of the Act provides for fines of up to 10,000 penalty units and/or imprisonment for up to 10 years for serious customs offences.