EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0844533
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.
Cryovac Pty Ltd applied for a TCO in respect of certain blown film extrusion plant on 18 December 2008.
Instrument
TCO No 0844533 was made on 13 March 2009. It declares that those certain blown film extrusion plant 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. 0844533 is taken to have come into force on 18 December 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, established a framework for the administration of customs duties and the regulation of the importation and exportation of goods. The Tariff Concession Instrument No. 0844533, introduced in 2009, addresses the gap in tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to grant reduced customs duty rates for certain imported items, provided that no substitutable goods are produced in Australia. This legislative instrument aims to foster trade by reducing the cost of importing specific machinery and equipment, thereby encouraging investment and economic growth. The explanatory statement for this instrument indicates that it was developed in response to an application by Cryovac Pty Ltd for tariff concessions on blown film extrusion plant, leading to a free rate of duty on these goods instead of the general 5% rate.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) that apply lower rates of customs duty on certain goods. The legislation applies to any person who makes an application under section 269F for a TCO, provided the goods in question are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The application process involves satisfying the core criteria, which include ensuring that no substitutable goods were produced in Australia at the time the application was lodged. The application must also meet the conditions outlined in sections 269C, 269D, and 269E of the Act. Once the CEO is satisfied that the application meets these criteria, a TCO is made under section 269P(3). The geographic and jurisdictional reach of this Act is national, applying to all entities and individuals within Australia, as well as to any goods imported into the country. The Act does not impose any liabilities on any person other than the Commonwealth and does not affect the rights of persons as at the date of registration in a manner that disadvantages them. The rights of importers are beneficially affected, allowing them to apply for a refund of duty under the relevant regulations.
Key Provisions
The Customs Act 1901 (the Act) outlines a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO), as detailed in Part XVA (subsection 269C(3)). Specifically, section 269F allows an individual to apply to the CEO for a TCO in respect of particular goods, provided these goods are not specified in section 269SJ of the Act, which lists goods that are ineligible for a TCO. The CEO must then assess whether the application meets the core criteria outlined in section 269C, which include ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these conditions are met, the CEO is required to issue a TCO, as stated in section 269P(3), thereby applying a prescribed tariff rate from Schedule 4 of the Customs Tariff Act 1995.
Under the Act, the CEO has specific obligations when considering a TCO application. These include ensuring that the application complies with the core criteria set out in section 269C, and that the goods in question are not specified in section 269SJ. If the CEO is satisfied that the application meets the criteria, they must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be granted (subsection 269K(1)). Furthermore, the CEO must consider any submissions received and make a decision accordingly. Once a TCO is issued, it is deemed to have come into force on the date the application was lodged (subsection 269S(1)), and the rights of importers will be beneficially affected as per paragraph 126(1)(r) of the Regulations, allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
The Act also imposes potential consequences for breaches or non-compliance with its provisions. While specific offences and penalties are not detailed within the text provided, it is known that breaches of the Customs Act can lead to civil or criminal penalties. Typically, civil penalties can include fines and other monetary penalties, while criminal offences may result in imprisonment, reflecting the seriousness with which the Act is enforced. The exact penalties would depend on the specific breach and the discretion of the court in applying the law.