EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808291
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.
Sustainable Organics (Wooshaway) Pty Ltd applied for a TCO in respect of certain plastic processing line on 15 May 2008.
Instrument
TCO No 0808291 was made on 08 August 2008. It declares that those certain plastic processing 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. 0808291 is taken to have come into force on 15 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation was designed to address the issue of providing tariff concessions on certain goods to promote trade and economic efficiency. The Act allows for reduced customs duty rates on goods specified in a TCO, provided the goods meet specific criteria, such as the absence of substitutable goods produced in Australia. Sustainable Organics (Wooshaway) Pty Ltd applied for a TCO for a specific plastic processing line, which was granted on 8 August 2008, effective from 15 May 2008. This concession resulted in a reduction of the general duty rate of 5% to free duty for these goods, benefiting importers who can now apply for duty refunds on imports since the TCO's effective date.
Scope and Application
The Customs Act 1901, as amended, facilitates tariff concession orders (TCOs) under Part XVA to reduce customs duties on specified goods, providing economic benefits to certain sectors. The Act applies to any person who applies for a TCO in respect of goods, subject to the condition that the goods are not those specified in section 269SJ, which cannot be subject to a TCO. The Chief Executive Officer of Customs (CEO) assesses applications against core criteria outlined in the Act, primarily focusing on whether substitutable goods are produced in Australia in the ordinary course of business. For instance, Sustainable Organics (Wooshaway) Pty Ltd successfully applied for a TCO for certain plastic processing lines, resulting in TCO No. 0808291. The CEO, satisfied that no substitutable goods were produced in Australia, made the order, effective from the date of the application, 15 May 2008. This TCO provides a zero-rate duty for the specified goods, down from the general rate of 5%. Importantly, the TCO does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth, ensuring that only future transactions benefit from the tariff concessions.
Key Provisions
The primary operative sections of this legislation, specifically the Customs Act 1901, outline a scheme for the creation of Tariff Concession Orders (TCOs) (s 269F). An application for a TCO can be submitted by any person to the Chief Executive Officer of Customs (the CEO) (s 269F). The CEO must then determine if the application complies with the core criteria (s 269C). The core criteria require that no substitutable goods are produced in Australia in the ordinary course of business on the date the application was lodged (s 269C, s 269D, s 269E). If these criteria are satisfied, the CEO must issue a written order, known as a TCO (s 269P(3)). The TCO specifies that the goods in question are subject to a particular rate of duty outlined in Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
The obligations imposed by the Act on the parties involved primarily concern the process for applying for and issuing a TCO. For applicants, the primary obligation is to submit a valid application to the CEO, ensuring that it pertains to goods that are not specified in section 269SJ of the Act (s 269F, s 269SJ). The CEO, on receiving a valid application, has the obligation to assess whether the application meets the core criteria and, if so, to issue a TCO (s 269C, s 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although this step is procedural and not mandatory for the issuance of the TCO (s 269K(1)).
There are no explicit offences, penalties, or consequences detailed in the explanatory statement for breaches of the Act or the TCO itself. However, it is implied that any misuse or improper application of the TCO could lead to legal consequences under the broader provisions of the Customs Act 1901. The explanatory statement highlights that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities (s 269S(1)). The primary remedy for any misuse or improper application would likely be through the judicial review process or other relevant legal actions under the Customs Act 1901.