EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721999
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 Limited applied for a TCO in respect of certain taping rewinding line on 27 December 2007.
Instrument
TCO No 0721999 was made on 14 March 2008. It declares that those certain taping rewinding lines 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. 0721999 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 Tariff Concession Instrument No. 0721999 was enacted under the Customs Act 1901 to address the need for a streamlined process to reduce the rate of customs duty for specific goods not produced domestically. The Instrument was developed in response to an application by Olex Australia Pty Limited for a Tariff Concession Order (TCO) concerning certain taping rewinding lines. The primary objective was to ensure that these goods, which are critical for particular industrial uses, are accessible at a reduced duty rate, thereby supporting economic efficiency and potentially fostering competitive markets. The instrument was enacted by the Chief Executive Officer of Customs and is designed to operate without adversely affecting the rights of any party as they stood prior to the order's implementation. This measure was introduced to facilitate easier access to essential imported goods, aligning with broader economic policies aimed at supporting industry and trade.
Scope and Application
The Tariff Concession Instrument No. 0721999 made under the Customs Act 1901 applies to the goods specified in the instrument, namely certain taping rewinding lines, and it is directed towards the Chief Executive Officer of Customs who is responsible for making the decision on the tariff concession order (TCO). The instrument is part of the Commonwealth's regulatory framework aimed at facilitating the importation of specific goods by granting concessional tariff rates. The scope of the Act applies to entities and individuals involved in the importation of these goods, particularly those who can demonstrate that the goods are not substitutable by any products manufactured within Australia. The Act's jurisdictional reach is national, as it pertains to the federal customs laws governing the importation of goods into Australia. Notably, the Act excludes certain goods from eligibility for a TCO as specified in section 269SJ of the Customs Act 1901. The application of the Act can be further refined or extended through subordinate instruments, which may specify additional details or criteria relevant to TCO applications. The Act ensures that any tariff concessions granted do not retroactively disadvantage or impose liabilities on individuals or entities other than the Commonwealth, safeguarding existing rights and obligations.
Key Provisions
The key operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) for goods, provided the goods are not listed in section 269SJ, which prohibits certain goods from being subject to a TCO. If the application meets the core criteria in section 269C—that is, if no substitutable goods were produced in Australia on the day the application was lodged—the CEO must make a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies. This means that the goods the subject of the TCO will be subject to a reduced rate of customs duty, as outlined in the relevant schedule.
The Act imposes several obligations and requirements on the parties it governs. Firstly, the CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ. If the application meets the core criteria, the CEO must then make a written TCO order. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who considers there are reasons why the TCO should not be made to lodge a submission. In the case of TCO No 0721999, no submissions were received. Furthermore, the Act ensures that 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 in respect of anything done or omitted to be done before the date of registration.
The Act outlines specific offences, penalties, and consequences for breach. Although the Act does not explicitly state maximum penalties for breaches, it is reasonable to infer that any non-compliance with the Act or its regulations could result in legal consequences. For example, if a person were to import goods that were subject to a TCO without paying the reduced duty rate, they could be subject to civil or criminal penalties, depending on the severity of the breach. Similarly, if the CEO were to fail to follow the requirements of the Act when processing a TCO application, they could face disciplinary action or other consequences as outlined in their employment terms or relevant legislation.
In conclusion, the main operative sections of this legislation provide a framework for the creation of Tariff Concession Orders, which allow for a reduced rate of customs duty on certain goods. The Act imposes several obligations on the CEO and other parties involved in the TCO process, such as ensuring that applications meet the core criteria and publishing notices in the Gazette. While the Act does not explicitly state maximum penalties for breaches, non-compliance with the Act or its regulations could result in legal consequences for individuals or entities involved in the import or processing of goods subject to a TCO.