EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1026115
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.
Australian Warehouse Solutions Pty Ltd applied for a TCO in respect of certain plastic strapping tools on 10 June 2010.
Instrument
TCO No 1026115 was made on 06 September 2010. It declares that those certain plastic strapping tools 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. 1026115 is taken to have come into force on 10 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 Tariff Concession Instrument No. 1026115 was introduced in 2010 as part of the Customs Act 1901, aiming to provide a mechanism for granting tariff concessions on certain imported goods. This legislative instrument was enacted by the Parliament of Australia to address the need for a streamlined process for applying and granting tariff concessions, thereby encouraging trade and potentially reducing costs for importers. The instrument is designed to offer a lower rate of customs duty on specific goods, provided they meet the criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The policy objective is to facilitate trade by reducing the customs duty burden on particular imported goods, thus supporting economic activity and potentially enhancing competitiveness for businesses reliant on these imports.
The process for implementing this concession involves an application to the Chief Executive Officer of Customs, who assesses the application against the criteria set out in the Customs Act 1901. If the application is deemed valid, the CEO issues a Tariff Concession Order (TCO) that specifies the goods eligible for the concession. The explanatory statement highlights that the instrument ensures the rights of existing parties are not adversely affected, while providing clear benefits to importers who can apply for duty refunds on eligible goods. The introduction of this instrument underscores the legislative intent to foster a more dynamic and responsive trade environment within Australia.
Scope and Application
The Tariff Concession Instrument No. 1026115 applies to the specific category of plastic strapping tools, as designated by Australian Warehouse Solutions Pty Ltd in their application under the Customs Act 1901. This legislation is applicable nationally, within the Commonwealth of Australia, and pertains to goods that are imported into the country. The primary objective of the Instrument is to provide a concession on the customs duty for these specified goods, as long as no substitutable goods are produced in Australia. The application process is overseen by the Chief Executive Officer of Customs, who evaluates whether the goods in question meet the criteria for tariff concessions, ensuring that they are not used in Australia in an ordinary course of business. The Instrument came into effect on the date the application was lodged, 10 June 2010, and provides a zero rate of duty for the specified plastic strapping tools, replacing the general rate of 5%. It is important to note that the Instrument does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The Tariff Concession Instrument No. 1026115, made under section 269F of the Customs Act 1901, pertains to the granting of Tariff Concession Orders (TCO) for specific plastic strapping tools (sections 269C and 269P(3)). This instrument was issued on 6 September 2010, following an application by Australian Warehouse Solutions Pty Ltd on 10 June 2010. The TCO declares that these tools are now subject to a zero duty rate, as opposed to the general rate of 5% (section 269P(3)). The instrument came into effect on the date of the application, 10 June 2010 (subsection 269S(1)).
The Act imposes several obligations on the Chief Executive Officer of Customs (CEO) when processing a TCO application. Firstly, the CEO must ensure that the application is not for goods specified in section 269SJ, which lists goods ineligible for a TCO. The CEO must then determine if the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the application date (section 269D). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application (subsection 269K(1)). The CEO is also required to consider any submissions received and make a written order if the application meets the core criteria (section 269P(3)).
For breaches of the provisions within the Customs Act 1901, various penalties and consequences may apply. While the explanatory statement does not explicitly detail the penalties for breaches related to TCOs, it is important to note that general provisions of the Customs Act may apply. Penalties can include fines and imprisonment for offences such as providing false or misleading information, fraud, or other serious breaches of customs regulations. The maximum penalties can vary significantly depending on the nature and severity of the breach.
Moreover, the Act ensures that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration to disadvantage that person or impose liabilities for actions taken before the registration date (subsection 269S(2)). Importers of the specified goods can benefit from this TCO by applying for a refund of duty on goods imported since the TCO came into effect, as outlined in paragraph 126(1)(r) of the Regulations. Importantly, no new liabilities are imposed on any person due to the TCO.