EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0946743
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.
Foamex Group Pty Ltd applied for a TCO in respect of certain expanded polystyrene block cutting lines on 02 December 2009.
Instrument
TCO No 0946743 was made on 26 February 2010. It declares that those certain expanded polystyrene block cutting lines 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. 0946743 is taken to have come into force on 02 December 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 Parliament of Australia, provides a framework for the administration of customs duties and other import charges, including the ability to grant tariff concessions to certain goods through Tariff Concession Orders (TCOs). This legislative instrument, specifically Tariff Concession Instrument No. 0946743, was introduced to address the problem of applying tariff concessions to goods where no substitutable goods are produced in Australia. The instrument was initiated by an application from Foamex Group Pty Ltd for tariff concessions on certain expanded polystyrene block cutting lines, which was processed by the Chief Executive Officer of Customs (CEO) in accordance with the provisions of the Customs Act. The policy objective is to reduce the customs duty for specified goods, thereby potentially lowering import costs and encouraging trade.
The instrument, effective from 02 December 2009, declares that certain expanded polystyrene block cutting lines are subject to a free rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods are produced in Australia. This tariff concession was made without any objections from the public following the CEO’s publication of the application in the Gazette. The commencement of this TCO aligns with the date the application was lodged, and it does not adversely affect existing rights or impose new liabilities on any party except the Commonwealth. Importers of these goods can benefit from this concession by applying for duty refunds for imports made since the TCO’s effective date.
Scope and Application
The Tariff Concession Instrument No. 0946743 under the Customs Act 1901 applies specifically to certain expanded polystyrene block cutting lines, following an application made by Foamex Group Pty Ltd. This Instrument is applicable to the goods specified in the application, provided they meet the core criteria outlined in the Act. The primary geographic and jurisdictional reach of this Act is national, as it is administered by the Chief Executive Officer of Customs at a Commonwealth level. The application of this Tariff Concession Order (TCO) is restricted by the conditions stipulated in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The order becomes effective from the date the application was lodged, in this case, 02 December 2009, as per subsection 269S(1) of the Act. Additionally, the TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth in respect of actions taken prior to the registration of the TCO. This legislative instrument thus aims to provide tariff concessions to specified goods while ensuring compliance with the overarching provisions of the Customs Act 1901 and related regulations.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows for an application to be submitted by a person seeking a TCO for specific goods. If the CEO determines that the goods are not restricted by section 269SJ, they then assess whether the application meets the core criteria set out in section 269C. This requires a determination that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269F of the Act respectively. If the CEO is satisfied that the application meets these criteria, they must make a TCO as per section 269P(3).
The obligations imposed by the Customs Act 1901 on the parties involved in the TCO process are primarily centred around the application and assessment stages. The CEO must ensure that any TCO application is valid and meets the criteria outlined in the Act. Once an application is accepted as valid, the CEO is required to publish a notice in the Gazette, as per section 269K(1), inviting any person who may have objections to the proposed TCO to lodge submissions with the CEO. If no objections are received, the CEO must proceed to make the TCO. Additionally, the CEO must ensure that any TCO made does not adversely affect the rights of any person as at the date of registration and does not impose any new liabilities.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can result in various consequences. While the Act does not explicitly outline specific offences or penalties for breaches related to TCOs, breaches of other sections of the Act or associated regulations may lead to civil or criminal penalties. For example, section 276 of the Act provides that a person who contravenes certain provisions of the Act is liable to a fine, which in the case of a corporation, can be up to 10,000 penalty units, or imprisonment for a term up to five years, or both, depending on the severity of the offence. Similarly, other relevant sections may impose fines or penalties for incorrect declarations or fraudulent activities related to customs duties.
In summary, the Customs Act 1901 provides a structured approach to the creation of Tariff Concession Orders through specific sections that define the application process, assessment criteria, and the CEO's obligations. Failure to adhere to the provisions of the Act or related regulations can result in significant civil or criminal penalties, underscoring the importance of compliance with the stipulated requirements.