EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0801293
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.
Dincel Construction Systems Pty Ltd applied for a TCO in respect of certain pvc profile extrusion lines on 24 January 2008.
Instrument
TCO No 0801293 was made on 11 April 2008. It declares that those certain pvc profile extrusion 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. 0801293 is taken to have come into force on 24 January 2008.
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 establish a framework for the regulation of customs and excise duties, among other things. It includes provisions for the creation of Tariff Concession Orders (TCOs) to provide relief from certain customs duties under specific circumstances. The Tariff Concession Instrument No. 0801293 was introduced to address the need for concessional tariffs on particular imported goods when no substitutable goods are produced in Australia. This instrument was made by the Chief Executive Officer of Customs under the authority conferred by section 269F of the Customs Act 1901. The policy objective behind this instrument is to facilitate the importation of goods essential for business operations without imposing undue financial burdens, thereby supporting trade and economic activities. The instrument was not subject to submissions from the public, as no objections were raised following the publication of the application in the Gazette.
Scope and Application
The Tariff Concession Instrument No. 0801293, under the Customs Act 1901, applies to persons or entities seeking tariff concessions on imported goods, specifically in this case, certain PVC profile extrusion lines. This instrument is a mechanism through which the Chief Executive Officer of Customs can grant lower rates of customs duty on specified goods, provided they meet the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The instrument extends to the Commonwealth jurisdiction, impacting importers by allowing them to potentially claim refunds for duties paid on these goods since the date the TCO is deemed to have come into force, which in this instance is 24 January 2008. Importantly, the instrument does not disadvantage any person by affecting their rights as they stood on the date of registration, nor does it impose new liabilities on anyone. Any exclusions or limitations on the application of this Act would typically be detailed within the Act itself or through subordinate instruments, although in this specific case, no such exclusions were noted.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0801293 under the Customs Act 1901 (section 269F) outline the procedure for applying for a Tariff Concession Order (TCO). An applicant may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, provided the goods are not listed in section 269SJ, which details goods that cannot be subject to a TCO. The CEO must decide if the application meets the core criteria set out in sections 269C and 269P(3). If the CEO is satisfied that the application meets the criteria, they must make a written TCO declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, the CEO declared that certain PVC profile extrusion lines are subject to item 50 of Schedule 4, with a duty rate of free instead of the general rate of 5%.
The Act imposes certain obligations on the parties involved. Firstly, the CEO is required to accept and process applications for TCOs, ensuring they meet the specified criteria. Secondly, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO. In this instance, no submissions were received. Furthermore, the CEO must ensure that the TCO does not affect the rights of any person adversely, particularly with respect to actions taken before the registration date. In this case, the TCO does not impose any liabilities on any person, and importers can apply for a refund of duty on goods imported since the TCO's effective date.
In terms of offences and penalties, the Act does not explicitly outline specific penalties for breach of the TCO provisions. However, general provisions under the Customs Act 1901 and related regulations may apply, including fines and imprisonment for fraudulent or deliberate non-compliance with customs regulations. The severity of penalties would depend on the nature and extent of the breach, but they could include substantial fines and potential imprisonment for serious or repeated violations. Compliance with the TCO is essential to avoid these potential consequences and to ensure smooth operation within the customs duty framework.