EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826501
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.
Laminex Group applied for a TCO in respect of certain powder coating line on 14 August 2008.
Instrument
TCO No 0826501 was made on 07 November 2008. It declares that those certain powder coating line 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. 0826501 is taken to have come into force on 14 August 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 by the Australian Parliament and provides the legal framework for customs administration in Australia. The Act was introduced to address the need for regulating the importation and exportation of goods, ensuring compliance with customs laws, and collecting duties and taxes on imported goods. One aspect of the Act is the scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on goods that meet certain criteria. The policy objective of the TCO scheme is to provide relief from customs duty for goods where no substitutable goods are produced in Australia, thereby encouraging the importation of goods that would otherwise not be available domestically.
In 2008, the CEO accepted an application from Laminex Group for a TCO on certain powder coating lines, and subsequently issued TCO No. 0826501. This order declares that these specific powder coating lines are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods were produced in Australia at the time of the application. The TCO came into force on 14 August 2008, and no submissions were received in response to the invitation for objections. The rights of importers are beneficially affected by the TCO, which allows them to apply for a refund of duty on goods imported since the commencement date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods for which an applicant has requested a tariff concession, provided that the goods are not specified as ineligible under section 269SJ of the Act. A TCO may be issued if the CEO is satisfied that no substitutable goods are produced in Australia at the time of application, as outlined in section 269C of the Act. This instrument applies to any person or entity that has applied for such a concession and meets the specified criteria. The geographic reach of the Act and its provisions, including TCOs, is national, applying throughout Australia. The Act does not specify exclusions or exemptions beyond those goods listed in section 269SJ, and no thresholds are mentioned in the explanatory statement. The application of the Act can be extended or restricted through subordinate instruments, although specific details are not provided in the statement.
Key Provisions
The Tariff Concession Instrument No. 0826501 pertains to the Customs Act 1901 and focuses on the establishment of Tariff Concession Orders (TCOs). According to section 269F, an individual or entity can apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. For the application to be considered, it must not be for goods specified in section 269SJ, which are ineligible for TCOs. Section 269C stipulates that the application meets the core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. "Substitutable goods" are defined in section 269D, "ordinary course of business" in section 269E, and the conditions for being "substitutable" are detailed in section 269F.
The CEO’s obligations under the Act include reviewing the TCO application, determining if it meets the core criteria, and making a decision based on the assessment. If the application is deemed valid, the CEO must issue a written order, known as a TCO, as outlined in section 269P(3). This order declares that the goods in question are subject to a specified item of Schedule 4 of the Customs Tariff Act 1995, with a particular focus on the general rate of duty, which can be reduced to free under the TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). In this case, no submissions were received.
Breaches of the requirements set out in the Customs Act 1901 can lead to various consequences. While specific offences and penalties are not detailed in the explanatory statement, it is likely that non-compliance with the TCO process or misrepresentation in an application could result in administrative penalties. The severity of these penalties can vary depending on the nature and extent of the breach but could include fines or other financial penalties as stipulated by relevant Australian laws. The Act ensures that the rights of individuals and entities are protected, particularly regarding any actions taken before the TCO's effective date, as specified in subsection 269S(1).