EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0827796
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.
Jb Macmahon Pty Ltd applied for a TCO in respect of certain glass bottles depalletisers on 22 August 2008.
Instrument
TCO No 0827796 was made on 14 November 2008. It declares that those certain glass bottles depalletisers 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. 0827796 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0827796, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific goods, in this case, certain glass bottles depalletisers, to support Australian businesses and reduce costs. This instrument was created in response to an application by Jb Macmahon Pty Ltd for a Tariff Concession Order (TCO) submitted on 22 August 2008. The instrument was made on 14 November 2008, after the Chief Executive Officer of Customs was satisfied that no substitutable goods were being produced in Australia, meeting the core criteria set out in the Customs Act. The policy objective of this TCO was to reduce the duty rate from the general rate of 5% to free, thereby providing relief to importers of these goods and promoting competitive pricing in the market. The TCO came into effect on the date of the application, 22 August 2008, and did not affect any pre-existing rights or liabilities.
Scope and Application
The Tariff Concession Instrument No. 0827796 applies to the goods specified in the instrument, which in this instance are certain glass bottles depalletisers. The Act under which this Instrument operates is the Customs Act 1901, and it applies to any person or entity wishing to import these specific goods into Australia. The geographic reach of this Act is national, as it pertains to customs duties across Australia. The application process and concessions granted are administered by the Chief Executive Officer of Customs. The TCO applies to imports of goods that are not being produced in Australia in the ordinary course of business, thereby ensuring that local industries are not disadvantaged. The Act does not specify any exclusions or exemptions for this particular Instrument, though it does state that the rights of importers will be beneficially affected, allowing them 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 application of this Instrument can be extended or restricted through subordinate instruments, although such measures are not detailed in this specific explanatory statement.
Key Provisions
The Customs Act 1901, particularly Part XVA, allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer (CEO) of Customs, as detailed in section 269F. A TCO provides a lower rate of customs duty on goods specified in the order. To qualify for a TCO, an applicant must ensure that the goods do not fall under the list in section 269SJ, which includes goods that cannot be subject to a TCO. Section 269C stipulates that an application for a TCO will meet the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
When the CEO determines that a TCO application meets the core criteria, they are required by section 269P(3) to issue a written order (TCO) that specifies the goods to which a particular item of Schedule 4 in the Customs Tariff Act 1995 applies. This TCO then sets the duty rate for the specified goods, as illustrated in TCO No. 0827796, which applies a zero rate of duty on certain glass bottles depalletisers, reducing it from the general rate of 5%. The TCO takes effect on the date the application was lodged, as per subsection 269S(1), thereby allowing for the benefits to be applied retroactively from that date.
The CEO is mandated by subsection 269K(1) to publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application. This was done for TCO No. 0827796, but no submissions were received. Additionally, section 269S(1) ensures that the rights of non-Commonwealth persons are not adversely affected by the TCO. Importers can benefit from this order by applying for a refund of duties on goods imported since the effective date of the TCO, as outlined in paragraph 126(1)(r) of the Regulations.
The Customs Act 1901 imposes several obligations on parties involved with TCOs. The CEO must meticulously assess whether the core criteria are met and whether the goods specified in the application fall outside the restricted list in section 269SJ. The applicant must ensure that the goods for which they seek a TCO do not have substitutable alternatives produced in Australia. Importers are required to apply for duty refunds if they have imported the specified goods before the TCO came into effect.
Failure to comply with the provisions of the Customs Act 1901 related to TCOs can result in various consequences. While the Act does not explicitly list offences or penalties for breaches of TCO provisions, general penalties for non-compliance with customs regulations may apply. These can include fines and imprisonment for more severe violations, as stipulated in the Crimes Act 1914 and the Customs Act 1901. The maximum penalties can vary depending on the nature and severity of the breach, but they may include substantial financial penalties and imprisonment terms up to several years.