EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908230
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.
Cantarella Bros applied for a TCO in respect of certain multi layer film on 11 March 2009.
Instrument
TCO No 0908230 was made on 29 May 2009. It declares that those certain multi layer film 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. 0908230 is taken to have come into force on 11 March 2009.
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 regulate the importation and exportation of goods, among other things, by imposing customs duties on imported goods. The Tariff Concession Instrument No. 0908230 was introduced by the Commonwealth Parliament to provide relief from customs duties on certain specified goods, addressing the gap where some imported goods may not have substitutable Australian-produced alternatives. This particular instrument was enacted to respond to an application by Cantarella Bros for tariff concessions on certain multi layer film, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. The policy objective, as stated in the Act, is to encourage the import of goods for which no Australian-made equivalent exists, thereby supporting economic efficiency and potentially fostering growth in related industries by making imported goods more competitively priced. The instrument came into force on the date the application was lodged, ensuring that the tariff relief applied retroactively from that date, with no adverse effect on the rights of persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, under its Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to specific goods. This legislative provision applies to individuals or entities seeking to import goods that may benefit from a tariff concession. The scope of the Act encompasses the entire Commonwealth of Australia, applying to all goods imported into the country. The Act excludes certain goods, such as those specified in section 269SJ, which cannot be subject to a TCO. Additionally, the Act allows for the creation of subordinate instruments that can extend or restrict the application of the TCO scheme. For instance, the explanatory statement for Tariff Concession Instrument No. 0908230 outlines a specific case where certain multi-layer films were granted a tariff concession, reducing their duty from the general rate of 5% to free. The TCO mechanism also includes provisions for public consultation and ensures that the rights of existing parties are not adversely affected by the implementation of a new TCO.
Key Provisions
The main operative sections of this legislation (sections 269C, 269F, 269P, and 269S) detail the process by which a Tariff Concession Order (TCO) may be applied for, assessed, and granted. Specifically, section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specified goods. The CEO then assesses whether the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia at the time of the application. If the CEO is satisfied that the application meets these criteria, a written order is made under section 269P, declaring that the goods the subject of the TCO application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This TCO, once made, is taken to have come into force on the day the application was lodged (section 269S).
The Act imposes several obligations on the parties involved. The CEO is required to ensure that any application for a TCO is assessed against the core criteria, which includes verifying that no substitutable goods were produced in Australia at the time of the application. The CEO must also publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). Additionally, any person who believes they may be adversely affected by the TCO must lodge a submission with the CEO. The obligations of the applicant, in this case, Cantarella Bros, are to ensure that their application is complete and meets the criteria outlined in the Act.
Failure to comply with the requirements of the Customs Act 1901 may result in various consequences. While the explanatory statement does not specify offences under the Act, breaches of the conditions under which a TCO is granted could potentially lead to civil or criminal penalties, depending on the nature and severity of the breach. Penalties could include fines or imprisonment, although the exact penalties are not detailed in the explanatory statement. The Act does, however, provide for the potential for refunds of duty on goods imported since the TCO came into force, which is a benefit to importers who can demonstrate eligibility.
Overall, the legislation aims to facilitate the process of applying for and granting tariff concessions while ensuring that the interests of all parties are considered. The obligations are clearly defined for both the CEO and applicants, and the potential for adverse consequences for non-compliance serves as a deterrent against improper applications or breaches of the Act’s conditions. The explanatory statement underscores the importance of transparency and public consultation in the process of granting tariff concessions.