EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835989
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.
Snaith Industries Pty Ltd applied for a TCO in respect of certain plastic injection moulds on 17 October 2008.
Instrument
TCO No 0835989 was made on 14 January 2009. It declares that those certain plastic injection moulds 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. 0835989 is taken to have come into force on 17 October 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. 0835989 was enacted in 2009 as part of the Customs Act 1901, addressing the need for a streamlined process to reduce customs duties on specific goods that are not produced domestically. This legislative instrument was developed in response to applications from businesses seeking to reduce the cost burden of importing goods that have no local alternatives. The enacting body was the Chief Executive Officer of Customs, who was empowered to make Tariff Concession Orders under section 269F of the Act. The policy objective of this instrument is to facilitate trade by providing tariff concessions where appropriate, thereby encouraging the import of goods that are not produced in Australia and potentially stimulating economic activity by lowering costs for businesses.
This instrument came into force on the date the application was lodged, 17 October 2008, and provides a duty-free rate for specified plastic injection moulds, reducing the general duty rate from 5% to free. The process involved publishing a notice in the Gazette to invite public submissions, although none were received. Importantly, the Tariff Concession Order does not impact the rights of any person other than the Commonwealth and does not impose any new liabilities, ensuring that the benefits are passed on to importers who can claim refunds for duties paid on imports since the effective date of the Order.
Scope and Application
The Customs Act 1901, through Part XVA, provides a mechanism for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce or eliminate customs duties on certain goods. The application of this Act applies to individuals and entities seeking to import goods that are not currently produced in Australia and are eligible for tariff concessions. The geographic scope of the Act is national, as it applies across all states and territories of Australia. The Act includes specific exclusions, such as goods listed in section 269SJ, which cannot be subject to a TCO. The application process requires the applicant to meet core criteria, primarily that no substitutable goods are produced in Australia in the ordinary course of business. The instrument in question, TCO No. 0835989, was issued on 14 January 2009 for certain plastic injection moulds, resulting in a concession from a general duty rate of 5% to free duty. This concession has been effective since the date of the application, 17 October 2008, without any retrospective liability for importers or other persons. The instrument does not affect existing rights or impose new liabilities on anyone other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0835989 under the Customs Act 1901 (section 269C) provides for tariff concessions on certain goods. Specifically, it addresses the application of Tariff Concession Orders (TCOs) for goods that are not substitutable by Australian-produced goods. In this case, the CEO of Customs granted a TCO for certain plastic injection moulds, effective from 17 October 2008 (section 269S(1)). The TCO reduces the duty rate on these moulds from the general rate of 5% to free, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (subsection 269P(3)).
The Act imposes obligations on both the applicant and the CEO of Customs. The applicant must ensure that the goods in question do not have substitutable Australian-produced equivalents, as defined in section 269D and 269E of the Customs Act 1901. Upon receiving a valid application, the CEO must consider whether the core criteria are met and, if so, make a written TCO (section 269C). The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties, although in this instance no submissions were received (subsection 269K(1)).
The Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for breaches of the TCO provisions. However, the general legal framework surrounding customs duties and the making of TCOs may imply that any fraudulent applications or misrepresentations could lead to civil or criminal penalties. Such penalties could potentially include fines or imprisonment, depending on the severity of the breach and applicable laws. The specific penalties would be determined according to the general principles of Australian administrative and criminal law, although the maximum penalties are not detailed in the explanatory statement provided.