EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840254
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.
Lisec Australia applied for a TCO in respect of certain cullet refuse line on 18 November 2008.
Instrument
TCO No 0840254 was made on 27 February 2009. It declares that those certain cullet refuse 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. 0840254 is taken to have come into force on 18 November 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 to establish a framework for the administration of customs and excise duties and includes provisions for Tariff Concession Orders (TCOs). The problem or gap it was introduced to address is the need to provide tariff concessions for specific goods, ensuring that these goods are not being produced domestically in a way that would be substituted by imported goods. The Tariff Concession Instrument No. 0840254, made under the authority of the Customs Act 1901, was introduced by the Chief Executive Officer of Customs to address the application by Lisec Australia for a tariff concession on certain cullet refuse line. The policy objective of this instrument is to provide a tariff concession for these goods, given that no substitutable goods were being produced in Australia at the time of the application. This was achieved by publishing a notice in the Gazette inviting submissions, which did not receive any objections, and subsequently making the TCO effective from the date of the application, 18 November 2008.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling a lower rate of customs duty for certain goods. The scope of the Act applies to any person or entity that may apply for a TCO, provided that the goods in question are not specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The Act's jurisdictional reach is national, given that it is a Commonwealth Act. The application process requires that the goods in question do not have substitutable alternatives produced in Australia, as defined under sections 269C, 269D, and 269E of the Act. Once the core criteria are satisfied, a TCO is issued, as demonstrated by Tariff Concession Instrument No. 0840254, which applied to certain cullet refuse line and effectively set their customs duty rate to free, down from the general rate of 5%. The Act also mandates public consultation through Gazette notices to allow any interested parties to submit objections, although in this case, none were received. The TCO's commencement date aligns with the date the application was lodged, ensuring that the rights of importers are positively impacted, including their eligibility for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of this legislation, specifically sections 269C, 269P(3), and 269S, govern the process for making a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269C defines the core criteria that must be satisfied for a TCO application to be considered. This includes the requirement that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these core criteria, they must issue a written TCO. Finally, section 269S outlines the commencement of the TCO, which is deemed to take effect on the date the application was lodged.
The Act imposes several obligations on the parties involved. Firstly, it requires applicants such as Lisec Australia to ensure that their applications meet the specified core criteria, including the demonstration that no substitutable goods were produced in Australia. The CEO of Customs has the responsibility to review applications, determine if they meet the core criteria, and if so, issue a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. In this case, no submissions were received, which facilitated the issuance of TCO No. 0840254.
There are no explicit offences or penalties stated within the text of this legislation for breaches of the provisions related to TCOs. However, the general legal framework under the Customs Act 1901 may include various penalties for non-compliance with customs regulations, which could be applicable if any party fails to adhere to the requirements of a TCO. Given the nature of the legislation, any significant breach could potentially lead to civil or criminal consequences, although specific penalties are not detailed in the provided text.