EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802221
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.
Mulford Plastics Pty Ltd applied for a TCO in respect of certain aluminium composite panels on 12 February 2008.
Instrument
TCO No 0802221 was made on 2 May 2008. It declares that those certain aluminium composite panels 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. 0802221 is taken to have come into force on 12 February 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 Tariff Concession Instrument No. 0802221 was enacted in 2008 under the Customs Act 1901. This legislation addresses the problem of ensuring that Australian businesses can access essential goods at a reduced customs duty rate if these goods are not produced domestically. The Tariff Concession Orders (TCO) scheme under Part XVA of the Customs Act 1901 allows the Chief Executive Officer of Customs to reduce customs duty on certain imported goods, provided that there are no substitutable goods produced in Australia. This instrument was introduced to support the policy objective of facilitating the import of goods that are necessary for Australian businesses, thereby aiding economic activity and competitiveness without imposing any new liabilities on individuals or entities. The instrument came into force on the date of the application, 12 February 2008, and does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0802221, established under the Customs Act 1901, applies to any person or entity seeking a tariff concession order (TCO) for specific goods, in this case certain aluminium composite panels. The legislation enables the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, including the absence of substitutable goods produced in Australia. The geographic reach of this Act is national, as it is part of the Commonwealth's legislative framework. The application of the Act is restricted by section 269SJ, which excludes certain goods from being subject to a TCO. The Act allows for the application to be extended or restricted through subordinate instruments, as specified in the Customs Tariff Act 1995. This TCO, effective from 12 February 2008, does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities. Importers of the specified goods can apply for a refund of duty on imports since the TCO's effective date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0802221 under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, and 269P. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) to be issued by the Chief Executive Officer of Customs (the CEO). Specifically, it requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are further defined in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that these criteria are met, they must issue a written order (section 269P(3)) specifying the lower rate of customs duty applicable to the goods in question.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, applicants, such as Mulford Plastics Pty Ltd in this case, must ensure their applications meet the core criteria as defined by the Act. The CEO is required to assess each application and decide whether it meets these criteria based on the information provided. If satisfied, the CEO must issue a TCO within the prescribed timeframe (subsection 269K(1)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made. In this case, no submissions were received, which streamlined the process.
Under the Customs Act 1901, breaches of the conditions set out in the TCO could potentially lead to civil or criminal consequences, though the specifics are not detailed in the explanatory statement. Generally, non-compliance with customs regulations can result in penalties such as fines or imprisonment. The Customs Act 1901 also includes provisions for the recovery of unpaid duty, interest, and other charges, which could be pursued in cases where duty has been improperly claimed or not paid. The maximum penalties would depend on the specific breach and the discretion of the courts, but they could include substantial fines and potential imprisonment for serious or repeated offences.