EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1031105
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.
Ptt Management Pty Ltd applied for a TCO in respect of certain air bubble and aluminium foil laminate production lines on 08 July 2010.
Instrument
TCO No 1031105 was made on 13 September 2010. It declares that those certain air bubble and aluminium foil laminate production 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. 1031105 is taken to have come into force on 08 July 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, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These TCOs allow for the reduction or exemption of customs duties on certain goods under specific circumstances. The 2011 Explanatory Statement relates to Tariff Concession Instrument No. 1031105, which was introduced to address the need for tariff concessions for particular goods that do not have substitutable domestic production. This instrument was created in response to an application by Ptt Management Pty Ltd for tariff concessions on specific air bubble and aluminium foil laminate production lines, which were granted as no substitutable goods were produced in Australia at the time. The policy objective of this legislation is to facilitate the importation of goods by providing tariff concessions where appropriate, thereby supporting industry competitiveness and economic efficiency without imposing any liabilities or disadvantaging existing rights holders.
Scope and Application
The Tariff Concession Instrument No. 1031105 pertains to the Customs Act 1901, which empowers the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for specified goods, thereby reducing the applicable customs duty. The Act applies to any individual or entity that seeks a TCO for goods that meet the criteria set out in the Act. This includes businesses and importers of goods that may benefit from reduced duty rates on specified items. The geographic reach of the Act is national, as it is a Commonwealth Act. The Act excludes certain goods from eligibility for a TCO as per section 269SJ, which specifies goods that cannot be subject to such concessions. The application of the Act can be extended or restricted through subordinate instruments, which may provide further detail or exceptions. The TCO No. 1031105 specifically pertains to certain air bubble and aluminium foil laminate production lines, which are now subject to a free duty rate under the Customs Tariff Act 1995. This concession came into force on the date the application was lodged, 08 July 2010, and importers of these goods can apply for a refund of duty from that date.
Key Provisions
The Tariff Concession Instrument No. 1031105, made under the Customs Act 1901 (the Act), is designed to provide specific tariff concessions for certain goods. Section 269F (1) of the Act allows for the application to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ of the Act, they must then assess whether the application meets the core criteria outlined in section 269C. For the CEO to be satisfied, it must be confirmed that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in section 269D and section 269E of the Act.
Under section 269P (3) of the Act, if the CEO determines that the application meets the core criteria, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) that applies to the goods in question. This particular TCO, No. 1031105, pertains to certain air bubble and aluminium foil laminate production lines, declaring that these goods are subject to item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free, as opposed to the general rate of 5%. The CEO must also ensure that a notice is published in the Gazette, inviting any interested parties to submit any objections to the making of the TCO, as required by subsection 269K(1) of the Act.
The obligations imposed by the Act on the parties involved primarily revolve around the process of applying for and obtaining a TCO. The applicant must submit a valid application that meets the core criteria specified in section 269C of the Act. The CEO, on the other hand, is obligated to review the application, publish a notice in the Gazette inviting submissions, and make a written TCO if the application meets the criteria. The CEO must also ensure that the TCO does not affect the rights of any person adversely and does not impose any liabilities on any person in respect of actions taken before the TCO's registration date.
Should there be any breach of the requirements set out in the Act, the consequences can include both civil and criminal penalties. While specific offences and penalties are not detailed in the text, general provisions under the Customs Act 1901 might include fines and imprisonment for wilful breaches. The maximum penalties could vary based on the severity and intent of the breach, with more severe breaches potentially leading to higher fines and longer imprisonment terms. Additionally, any person adversely affected by the TCO may have the right to seek redress under the relevant provisions of the Act.