EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0806483
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.
SCS Plastic Pty Ltd applied for a TCO in respect of certain vacuum and pressure thermoforming lines on 05 May 2008.
Instrument
TCO No 0806483 was made on 25 July 2008. It declares that those certain vacuum and pressure thermoforming 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. 0806483 is taken to have come into force on 05 May 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. 0806483 was enacted in 2008 under the Customs Act 1901 to address the need for a tariff concession for specific goods that are not produced in Australia. This instrument was introduced to provide a mechanism through which the Chief Executive Officer of Customs could grant tariff concessions, thereby lowering the customs duty on certain imported goods. The process involves an application by interested parties, followed by an assessment by the CEO to determine if the goods meet the criteria for concession, such as the absence of substitutable goods produced in Australia. The objective of this legislation is to encourage the importation of goods that are not locally produced, thereby benefiting importers and potentially fostering competition and consumer choice. The instrument came into effect on the date of the application, ensuring that the rights of importers are protected and that no retroactive liabilities are imposed.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCO) scheme, allows the Chief Executive Officer of Customs to apply lower rates of customs duty on goods specified in a TCO. This applies to any person or entity seeking a tariff concession for goods that are not listed in section 269SJ of the Act, which includes goods that are harmful or prohibited. The application process involves meeting core criteria, primarily that no substitutable goods are produced in Australia at the time of application. The TCO applies nationally across Australia and the geographic scope is not limited to specific states or territories. The order is effective from the date the application is lodged and does not retroactively affect the rights of any person, ensuring that no one is disadvantaged by the concession. Any importer can benefit from this by applying for a refund of duties on eligible goods imported since the effective date of the TCO. This instrument allows for the expansion of tariff concessions through subordinate instruments, thus extending its application based on the needs and economic considerations at the time.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0806483 are sections 269C, 269P, and 269S, which establish the process for making a Tariff Concession Order (TCO). Under section 269F, a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is not for goods specified in section 269SJ, the CEO must decide whether the application meets the core criteria, as defined in section 269C. If the application meets these criteria, the CEO must make a written order declaring that the goods are subject to the TCO (section 269P(3)). The instrument declares that certain vacuum and pressure thermoforming lines are subject to a TCO, which applies item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5% (section 269S).
The Act imposes several obligations and requirements on the parties involved. Firstly, applicants must ensure their applications comply with section 269F, which requires that the goods in question are not specified in section 269SJ. The CEO is obligated to assess applications under section 269C, verifying that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must consider any submissions received. Additionally, the Act requires that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it must not impose any liabilities on any person in respect of actions taken before the TCO's effective date.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly detail offences, penalties, or civil/criminal consequences for breach of TCO provisions within the explanatory statement itself. However, it is implicit that any misuse or non-compliance with the terms of a TCO could potentially lead to enforcement actions under the broader Customs Act framework. This could include administrative penalties, fines, or legal proceedings for violations such as fraudulent applications, misrepresentation of facts, or failure to adhere to the conditions set forth in the TCO. The specific penalties would depend on the nature and severity of the breach and would be in accordance with the general penalties provided for under the Customs Act.