EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803405
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.
Amcor Packaging Pty Ltd applied for a TCO in respect of certain pallet insertion systems on 28 February 2008.
Instrument
TCO No 0803405 was made on 16 May 2008. It declares that those certain pallet insertion systems 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. 0803405 is taken to have come into force on 28 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. 0803405, enacted under the Customs Act 1901, was introduced to provide tariff concessions on certain goods by reducing or eliminating customs duty on them. This was done through a scheme under which Tariff Concession Orders (TCOs) could be made by the Chief Executive Officer of Customs (CEO) for goods that met specific criteria. The purpose of this instrument was to benefit importers by allowing them to apply for refunds on duties paid on goods imported since the effective date of the TCO, which, in this case, was 28 February 2008. The instrument was made on 16 May 2008, following an application by Amcor Packaging Pty Ltd for a TCO in respect of certain pallet insertion systems. The CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria for a TCO. The instrument was published in the Gazette, with no objections received from the public, and it came into force on the date the application was lodged, 28 February 2008.
This legislative instrument was enacted by the Parliament of Australia to streamline the process of tariff concessions for certain imported goods, ensuring that the rights of importers are not adversely affected and that they can benefit from reduced customs duty rates. The policy objective was to facilitate smoother import processes and potentially stimulate trade by making certain goods more competitively priced in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0803405 applies to certain pallet insertion systems and operates under the Customs Act 1901, providing a framework for the Chief Executive Officer of Customs to grant tariff concessions on specific goods. This concession is applicable to entities or individuals who import the specified pallet insertion systems, thereby reducing the customs duty on these goods from the general rate of 5% to free. The scope of this Act is national, extending throughout Australia, and it specifically addresses the import of goods that are not substitutable by domestically produced items, as defined under sections 269C, 269D, 269E, and 269SJ of the Act. Notably, the Act does not apply to goods listed in section 269SJ, which includes those that are in conflict with public policy or national security. The application of this tariff concession order is effective from the date the application was lodged, which in this case was 28 February 2008, and no submissions opposing the concession were received following the publication in the Gazette. This instrument neither disadvantages any person nor imposes liabilities on anyone for actions taken before its registration, thereby ensuring the protection of rights as they stood prior to the concession.
Key Provisions
The main operative sections of this legislation are sections 269C, 269B, 269D, 269E, 269P, and 269S of the Customs Act 1901 (the Act). Section 269C establishes the core criteria that a Tariff Concession Order (TCO) application must meet, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged. Sections 269B, 269D, and 269E define key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must make a TCO under section 269P(3). Additionally, section 269S determines that the TCO comes into force on the date the application was lodged, in this case, 28 February 2008.
The obligations and requirements imposed by the Act on the parties governed by it primarily involve the application process for a TCO. The applicant must ensure that the goods in question meet the core criteria specified in section 269C. This includes demonstrating that no substitutable goods are produced in Australia. The CEO has a duty to review the application, consider any submissions from the public, and make a decision based on whether the core criteria are met. If the CEO decides to grant the TCO, they must issue a written order specifying the tariff concession. Furthermore, the CEO is obligated to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as stipulated in section 269K(1).
Breaching the provisions of the Customs Act 1901 can lead to several consequences, including both civil and criminal penalties. While the Act does not explicitly state maximum penalties for violations, breaches of customs regulations generally attract significant fines and potential imprisonment. For instance, section 246A of the Act provides that a person who fraudulently evades customs duty or makes a false statement to avoid duty is liable to a penalty of up to 200 penalty units (approximately AUD 22,000) or imprisonment for up to five years, or both. Additionally, under section 246C, making a false statement with intent to obtain a financial benefit can result in a penalty of up to 500 penalty units (approximately AUD 55,000) or imprisonment for up to ten years, or both. These penalties underscore the seriousness of complying with the Act’s requirements and the importance of accurate and truthful submissions in the TCO application process.