EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1024672
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.
Arri Australia Pty Ltd applied for a TCO in respect of certain thermal film on 02 June 2010.
Instrument
TCO No 1024672 was made on 30 August 2010. It declares that those certain thermal 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. 1024672 is taken to have come into force on 02 June 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 Parliament of Australia, addresses the need for a scheme under which Tariff Concession Orders (TCOs) may be made to apply lower rates of customs duty on certain goods. The Act allows for TCOs to be issued by the Chief Executive Officer of Customs (CEO) provided the application meets the core criteria and no substitutable goods are produced in Australia. Tariff Concession Instrument No. 1024672, issued on 30 August 2010, is a specific instance where a TCO was applied to certain thermal films, setting their customs duty rate at free, down from the general rate of 5%. The instrument came into effect on 2 June 2010, the date the application was lodged, and provides benefits to importers by allowing them to apply for duty refunds on imports of these goods from that date. The CEO did not receive any submissions opposing the TCO, and the instrument does not disadvantage or impose liabilities on any person except the Commonwealth.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) to certain goods, which are subject to reduced or free customs duty. This scheme applies to individuals and entities seeking to import goods that meet the specified criteria for tariff concessions, which include the absence of substitutable goods produced in Australia. The Act allows for the Chief Executive Officer of Customs to make TCOs upon application, provided the goods do not fall under the category of items that cannot be subject to a TCO as outlined in section 269SJ. The application process involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. Once a TCO is made, it applies retroactively to the date of the application, thereby affecting the rights of importers by enabling them to seek refunds of duties paid on imports of the specified goods since the effective date of the TCO. The Act's application extends across the Commonwealth, with no specific exclusions or exemptions outlined in the explanatory statement, apart from the inherent limitations provided by the core criteria for TCOs.
Key Provisions
The Customs Act 1901, particularly Part XVA, outlines a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO allows for a lower rate of customs duty to be applied to certain goods (s 269C). To qualify for a TCO, an application must be made by a person to the CEO (s 269F). If the CEO determines that the application does not pertain to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the application is assessed against the core criteria (s 269C). Specifically, a TCO application meets these criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C, s 269D, s 269E).
For an entity applying for a TCO, the obligations include ensuring that the goods in question are not specified in section 269SJ and that they meet the criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO has a duty to publish a notice in the Gazette once an application is accepted as valid, inviting any interested party to submit any reasons why the TCO should not be made (s 269K(1)). In the case of TCO No. 1024672, Arri Australia Pty Ltd applied for a TCO on 2 June 2010, and no submissions were received in response to the notice.
If a TCO application is approved and the CEO issues a written order, the TCO comes into effect on the day the application was lodged (s 269S(1)). The TCO does not retroactively affect any rights or impose any liabilities on persons other than the Commonwealth (s 269S(2)). Instead, it benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date (Regulations, 126(1)(r)). The TCO applies to specific thermal film, granting a duty-free status for these goods under item 50 of Schedule 4 to the Customs Tariff Act 1995 (Tariff).
Breaches of the provisions of the Customs Act 1901 and associated regulations may result in civil or criminal penalties. While the explanatory statement does not detail specific penalties, it is known that breaches of customs laws can lead to substantial fines, imprisonment, or both, depending on the severity and intent of the breach. The maximum penalties can vary significantly, reflecting the seriousness of the offence and whether it was committed knowingly or negligently.