EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041002
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.
National Resources applied for a TCO in respect of certain cast polypropylene film on 06 September 2010.
Instrument
TCO No 1041002 was made on 29 November 2010. It declares that those certain cast polypropylene 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. 1041002 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 the legislative framework for the administration of customs and excise in Australia. One of the mechanisms under this Act is the ability to make Tariff Concession Orders (TCOs), which allow for the application of lower rates of customs duty on specified goods. The problem or gap this mechanism addresses is the potential for increased import costs and reduced competitiveness for Australian businesses when importing certain goods that could otherwise be produced domestically. TCO No. 1041002, made on 29 November 2010, is an example of such a concession, allowing for a free rate of duty on certain cast polypropylene film, as no substitutable goods were produced in Australia at the time of the application. This instrument was introduced following an application by National Resources, and the decision was made by the Chief Executive Officer of Customs after no objections were received during the consultation period. The primary policy objective behind this concession is to support Australian industries by reducing the cost of importing specific goods, thereby enhancing their competitiveness and operational efficiency.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs), which can be applied for by any person and are determined by the Chief Executive Officer of Customs. These TCOs grant a lower rate of customs duty on certain goods, contingent upon the CEO's determination that no substitutable goods are being produced in Australia at the time the application is made. The legislation stipulates that the application must meet core criteria, including the absence of Australian-produced substitutable goods, as defined under sections 269C and 269D. The TCO applies to the specific goods mentioned in the application and is effective from the date the application is lodged, with no retroactive effect on pre-existing rights or liabilities. Any interested party may lodge a submission against the TCO, though in this case, none were received. The scope of the Act is national, applying uniformly across Australia, and it does not extend to goods specified in section 269SJ, which are explicitly excluded from TCO consideration. Subordinate instruments may further define or modify the application of the Act.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1041002, as stated in the Explanatory Statement, involve the application and processing of Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F) and the subsequent making of these orders by the Chief Executive Officer of Customs (CEO) (section 269P). A TCO application can only be considered if the goods in question are not those prohibited by section 269SJ of the Act. The CEO must determine if the application meets the core criteria, which include the absence of substitutable goods produced in Australia as specified in sections 269C and 269D. Once the criteria are met, the CEO issues a written TCO, as outlined in section 269P(3).
Under this legislation, applicants such as National Resources must ensure their TCO applications meet the specified criteria, including the non-production of substitutable goods in Australia, as defined by sections 269D and 269E. The CEO has the obligation to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO (section 269K(1)). The CEO must also consider any submissions received and make a decision based on whether the application meets the core criteria. If the application is successful, the CEO must issue a TCO declaring the applicable tariff.
In the case of TCO No. 1041002, specific cast polypropylene film, the CEO determined that no substitutable goods were produced in Australia, thereby meeting the core criteria. Consequently, the CEO issued the TCO, setting the duty on these goods to free, down from the general rate of 5%. The TCO came into effect on the date the application was lodged, 06 September 2010, and does not affect the rights of any person as at the date of registration, ensuring that no one is disadvantaged or subjected to new liabilities as a result of the TCO (subsection 269S(1)).
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations can result in legal consequences. Offences under the Act may include providing false or misleading information in a TCO application, which can lead to criminal charges. The maximum penalties for such offences can vary, but they may include fines and imprisonment. Additionally, any breach of the conditions of a TCO can lead to civil consequences such as the imposition of fines or the requirement to pay back any undue duty concessions received. The specifics of penalties are not detailed in the Explanatory Statement, but they are generally stipulated in the relevant sections of the Act and associated regulations.