EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014319
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.
Silverwood Nursery Supplies applied for a TCO in respect of certain polyethylene film on 23 March 2010.
Instrument
TCO No 1014319 was made on 11 June 2010. It declares that those certain polyethylene 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. 1014319 is taken to have come into force on 23 March 2010.
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, provides for a framework where Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs, effectively reducing the customs duty on certain imported goods. This scheme was designed to address the issue of ensuring fair trade practices by allowing for tariff reductions on goods where no substitutable Australian-produced goods exist, thereby encouraging trade and protecting domestic industries from undue competition. The Tariff Concession Instrument No. 1014319, issued under this Act, aims to provide such tariff concessions for specific polyethylene film, with the policy objective of fostering economic efficiency and supporting businesses that rely on the import of these particular goods. The instrument, which came into force on the date of application, provides duty-free import status for these goods, thereby directly benefiting importers by potentially reducing their costs and increasing their competitiveness in the market.
Scope and Application
The Tariff Concession Instrument No. 1014319 applies to specific goods, namely certain polyethylene film, as identified by Silverwood Nursery Supplies in their application to the Chief Executive Officer of Customs. The Customs Act 1901 allows for Tariff Concession Orders (TCOs) to be made for goods that meet certain criteria, including that no substitutable goods are produced in Australia in the ordinary course of business. The CEO's decision to grant a TCO is based on the fulfilment of these criteria, resulting in a reduced or free customs duty for the specified goods. The application and subsequent TCO are effective from the date the application was lodged, which in this case was 23 March 2010. The TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, thereby ensuring that importers of these goods can benefit from the tariff concession by applying for a refund of duty for imports made since the effective date of the TCO. The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty and the goods affected by the TCO.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the application and implementation of Tariff Concession Orders (TCOs) that alter the duty rates on specific goods. Section 269F allows for applications to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods, provided they do not fall under the restricted category specified in section 269SJ. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, a TCO can be issued. This core criterion mandates that, on the day the application is lodged, there should be no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D (goods produced in Australia), 269E (ordinary course of business), and 269D (substitutable goods).
The obligations placed on the parties under this Act include ensuring that any TCO application adheres to the stipulated criteria. Specifically, applicants must demonstrate that there are no substitutable goods produced in Australia that could serve the same purpose as the goods in question. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO, as per subsection 269K(1). The CEO must also consider any submissions received and decide whether to issue the TCO based on the evidence presented.
Failure to comply with the requirements of the Act or the terms of a TCO can result in various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can lead to civil or criminal penalties. For example, knowingly making a false statement in a customs document can attract fines and imprisonment under section 255 of the Customs Act. Similarly, evading duty through misrepresentation can result in significant fines and penalties, as outlined in section 245 of the Act. The maximum penalties for such offences can vary, depending on the severity and intent behind the breach.