EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1047994
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.
Con Sonic Pty Ltd applied for a TCO in respect of a certain programmable logic controlled polyvinyl chloride (PVC) dry blend mixing plant on 27 October 2010.
Instrument
TCO No 1047994 was made on 25 January 2011. It declares that those certain programmable logic controlled polyvinyl chloride (PVC) dry blend mixing plants 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. 1047994 is taken to have come into force on 27 October 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 administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders, introduced to address the need for tariff reductions on specific goods to support industries and economic growth, allow for the application of a lower rate of customs duty to certain goods not produced in Australia. The Act empowers the Chief Executive Officer of Customs to make these orders upon meeting specific core criteria, such as the absence of substitutable goods being produced in Australia. The explanatory statement for Tariff Concession Instrument No. 1047994, issued on 25 January 2011, illustrates the application of this framework in practice. This particular instrument granted a tariff concession on programmable logic controlled polyvinyl chloride (PVC) dry blend mixing plants, reducing the duty rate from the general rate of 5% to free, effective from 27 October 2010, the date the application was lodged. This measure aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to the administration of customs duties and the regulation of imports and exports within Australia. Specifically, the Act provides the framework for the creation of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs can apply a lower rate of customs duty on certain goods. The application for a TCO must meet the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The scope of the Act includes all entities and individuals involved in the importation of goods subject to a TCO, and its application is national in terms of geographic reach, operating across all jurisdictions within Australia. The Act does not specify exclusions or exemptions but does include a provision for the publication of TCO applications in the Gazette to allow for public submissions, though in the case of TCO No 1047994 no submissions were received. The TCO itself, once registered, does not disadvantage any person or impose liabilities in relation to actions taken prior to the registration date, ensuring that only future transactions are affected by the tariff concession.
Key Provisions
The Customs Act 1901 establishes a framework for Tariff Concession Orders (TCOs) under which a lower rate of customs duty can be applied to specified goods (s 269F). An application for a TCO can be submitted to the Chief Executive Officer (CEO) of Customs by any person, provided the goods in question do not fall under the categories specified in section 269SJ of the Act. If the CEO determines that the application complies with the core criteria, as outlined in section 269C, the CEO must issue a written order that applies a specified tariff to the goods in question (s 269P(3)).
Under this legislative scheme, entities and individuals seeking tariff concessions must ensure that their applications meet the criteria set out in the Act, specifically the absence of substitutable goods produced in Australia on the date of the application (s 269C). The CEO's decision to accept or reject an application hinges on this criterion, which is further defined in sections 269D, 269E, and 269F of the Act. The obligations on applicants include providing all necessary information to substantiate their claims and responding to any requests for further information from the CEO.
Failure to comply with the requirements set out in the Customs Act 1901 and the associated regulations can lead to various civil and criminal consequences. While the explanatory statement does not explicitly enumerate the penalties for breaches, the Act generally provides for both civil and criminal penalties for non-compliance with customs laws. These can include fines, imprisonment, or both, depending on the severity and nature of the breach. The maximum penalties are determined by the specific provisions of the Act and any relevant subsidiary legislation.