EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932239
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.
Wellman Packaging applied for a TCO in respect of certain injection moulding system on 31 August 2009.
Instrument
TCO No 0932239 was made on 20 November 2009. It declares that those certain injection moulding system 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. 0932239 is taken to have come into force on 31 August 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, enacted by the Commonwealth Parliament, established a framework under which the Chief Executive Officer of Customs could issue Tariff Concession Orders (TCOs) to apply a lower rate of customs duty to certain goods. The 2010 Tariff Concession Instrument No. 0932239, which was introduced to address the problem of ensuring that specific goods not produced domestically could receive tariff concessions, exemplifies this mechanism. The instrument was made following an application by Wellman Packaging for a TCO on certain injection moulding systems, where the CEO determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for the concession. The instrument specifies that these systems are subject to a free rate of duty, down from the general 5% rate, and came into effect on the date the application was lodged. This legislative instrument aims to encourage the importation of goods that are not produced domestically, thereby potentially benefiting importers and stimulating market competition without imposing new liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0932239 under the Customs Act 1901 applies specifically to the injection moulding systems sought by Wellman Packaging, providing these goods with a concessional rate of customs duty, which is free, as opposed to the general rate of 5%. This Act applies to the Chief Executive Officer of Customs, who is tasked with making Tariff Concession Orders based on applications received from persons or entities seeking tariff concessions for goods. The scope of the Act extends to any goods that are not produced in Australia and do not have substitutable goods produced domestically, as outlined in the Act. The geographic reach of this Act is national, impacting importers across Australia by providing them the opportunity to claim refunds on duty paid on these goods since the effective date of the TCO. Any exclusions or exemptions are strictly defined in the Act, such as the prohibition on TCOs for goods specified in section 269SJ. The Act may also extend its application through subordinate instruments, although specific details regarding these instruments are not elaborated in the provided text.
Key Provisions
The Tariff Concession Instrument No. 0932239, under the Customs Act 1901, establishes a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on certain goods (section 269F). This process involves an application for a Tariff Concession Order (TCO) by interested parties, which must meet specific criteria to qualify for a concession. Section 269C stipulates that for an application to meet the core criteria, no substitutable goods must be produced in Australia on the date the application is lodged. The definition of substitutable goods is provided by section 269D, and the meaning of ordinary course of business by section 269E. If the CEO determines that an application meets these criteria, they are required to issue a TCO under section 269P(3).
The obligations imposed by this Act on the CEO are to evaluate applications against the core criteria, consult with the public through the Gazette as per section 269K(1), and, if satisfied, to issue a TCO. The CEO must also ensure that the rights of non-Commonwealth entities are not adversely affected by the TCO, as stipulated in section 269S(1). In this instance, the CEO assessed the application by Wellman Packaging for a TCO on an injection moulding system and, finding it met the criteria, issued TCO No. 0932239, which came into force on the date of application lodging, 31 August 2009.
Failure to comply with the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. Under section 269ZC, penalties for providing false or misleading information in an application for a TCO can result in a civil penalty of up to 10,000 penalty units or a criminal penalty of up to 12 months imprisonment. The Act also stipulates that breaches may lead to the disqualification of the TCO and potential recovery of any duty concessions already granted. This stringent approach ensures that the integrity of the tariff concession process is maintained and that the benefits of concessions are properly and legally allocated.