EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1029102
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.
Colgate Palmolive Pty Ltd applied for a TCO in respect of certain plastic bottle rotary filling and capping machines on 29 June 2010.
Instrument
TCO No 1029102 was made on 20 September 2010. It declares that those certain plastic bottle rotary filling and capping machines 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. 1029102 is taken to have come into force on 29 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 Australian Parliament, establishes a framework for the imposition of customs duties on imported goods. The Act allows for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can reduce or eliminate customs duty on specific goods under certain conditions. Specifically, a TCO may be issued if no substitutable goods are produced in Australia in the ordinary course of business. The Tariff Concession Instrument No. 1029102 was introduced to address the need for tariff concessions for certain plastic bottle rotary filling and capping machines, with Colgate Palmolive Pty Ltd being the applicant. This instrument declares that these machines are subject to a zero rate of duty, effective from the date of the application on 29 June 2010. The decision to grant the TCO was made after no objections were received from interested parties, as required by the Act. The policy objective is to facilitate the import of specific goods that are not domestically produced, thereby supporting industries that rely on imported machinery.
Scope and Application
The Tariff Concession Instrument No. 1029102 under the Customs Act 1901 applies to certain plastic bottle rotary filling and capping machines, as determined by the Chief Executive Officer of Customs (CEO) after assessing an application made by Colgate Palmolive Pty Ltd. This Act enables the CEO to establish lower rates of customs duty on specified goods through Tariff Concession Orders (TCOs) when certain conditions are met, such as the absence of substitutable goods produced in Australia in the ordinary course of business. This particular TCO, effective from 29 June 2010, reduces the duty on the specified machines from the general rate of 5% to free, thereby benefiting the rights of importers who can apply for a refund of duty on these goods imported since the effective date of the TCO. The TCO does not disadvantage or impose liabilities on any person other than the Commonwealth for actions taken before its registration.
Key Provisions
The Tariff Concession Instrument No. 1029102, made under section 269P of the Customs Act 1901, outlines the specific provisions for a Tariff Concession Order (TCO) for certain plastic bottle rotary filling and capping machines. This instrument declares that the specified machines are to be subject to a reduced customs duty rate, specifically applying item 50 of Schedule 4 to the Customs Tariff Act 1995. The general rate of duty on these machines is 5%, but under the TCO, the duty rate is set at free (section 269P(3)). This concession is applicable as of 29 June 2010, the date the application for the TCO was lodged (subsection 269S(1)).
Entities and individuals governed by the Customs Act 1901 must adhere to the conditions set forth in the TCO. Specifically, the CEO of Customs must ensure that the application for a TCO meets the core criteria as outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, any person who considers that there are reasons why the TCO should not be made must lodge a submission with the CEO within the timeframe specified in subsection 269K(1). The CEO is obligated to publish a notice in the Gazette inviting such submissions, and in this case, no submissions were received (subsection 269K(1)).
Breach of the provisions outlined in the Customs Act 1901 or non-compliance with the TCO may result in various consequences. While the explanatory statement does not detail specific offences or penalties under the TCO itself, general provisions of the Customs Act 1901 apply. Offences under the Customs Act could lead to both civil and criminal penalties. Civil penalties can include fines up to a substantial amount, depending on the severity of the breach, while criminal penalties could involve imprisonment for up to two years. The exact penalties would depend on the specific breach and the discretion of the court.