EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041001
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.
Guala Closures applied for a TCO in respect of certain foil hot stamping machines on 06 September 2010.
Instrument
TCO No 1041001 was made on 22 November 2010. It declares that those certain foil hot stamping 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. 1041001 is taken to have come into force on 06 September 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 a framework for the regulation of customs and excise duties, including the mechanism for Tariff Concession Orders (TCOs) under Part XVA. This legislative instrument was introduced to address the need for a streamlined process to grant tariff concessions on specific goods, which could help boost trade and industry by reducing the cost of importing certain items. The policy objective is to ensure that the Australian market remains competitive while providing relief to businesses that rely on importing specific goods not produced locally. Instrument No. 1041001, made under this Act, specifically concerns a concession for certain foil hot stamping machines, reducing their duty from 5% to free, reflecting the absence of substitutable goods produced in Australia. This concession aims to benefit importers and potentially lower the cost of these machines, thereby supporting related industries that depend on such equipment.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) scheme, applies to any person or entity seeking reduced customs duty on imported goods by applying for a TCO. The Act operates on a national level within Australia, encompassing all states and territories under the Commonwealth jurisdiction. The legislation specifically targets imported goods that are not substitutable by products manufactured in Australia, ensuring that the concession does not undermine local production. The scope of the Act is delineated by section 269SJ, which excludes certain goods from being subject to a TCO, such as those specified in the Act itself. The Act allows for the expansion and refinement of its application through subordinate instruments, which can define terms like 'substitutable goods' and 'ordinary course of business' more precisely. The application process involves a public consultation phase, where the Chief Executive Officer of Customs invites submissions from interested parties before making a decision on the TCO application. The commencement of a TCO is effective from the date of the application, ensuring that the tariff concession is applicable retroactively to imports occurring from that date.
Key Provisions
The Customs Act 1901, particularly Part XVA, establishes a framework through 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 on specified goods. To apply for a TCO, a person must submit an application to the CEO (s 269F). If the CEO determines that the application is valid and pertains to goods not listed in section 269SJ, which excludes certain goods from TCOs, the CEO must assess whether the application meets the core criteria outlined in section 269C. This assessment involves determining whether no substitutable goods were produced in Australia at the time the application was lodged (s 269C, s 269D, s 269E).
The CEO's obligations under the Act include publishing a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not proceed (s 269K(1)). This transparency measure ensures that all stakeholders have an opportunity to voice their concerns. If no submissions are received, the CEO proceeds with the order. In the case of TCO No 1041001, the CEO declared that certain foil hot stamping machines are subject to a 5% duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995 (s 269P(3)). This order was effective from the date the application was lodged, 06 September 2010.
In terms of consequences, if the CEO decides to make a TCO, it does not retroactively affect the rights of any person, except the Commonwealth, or impose liabilities on any person for actions taken prior to the order's registration (s 269S(1)). However, the rights of importers are positively affected as they can apply for a refund of duty on goods imported since the TCO's effective date (Reg. 126(1)(r)). Any breach of the Act's provisions, including improper application or misrepresentation, could lead to penalties, though specific penalties are not detailed in the explanatory statement.