EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1105148
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.
Cryovac Australia Pty Ltd applied for a TCO in respect of certain plastic film slitter and/or unfolding and/or cutting machines on 07 February 2011.
Instrument
TCO No 1105148 was made on 02 May 2011. It declares that those certain plastic film slitter and/or unfolding and/or cutting 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. 1105148 is taken to have come into force on 07 February 2011.
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 was enacted by the Australian Parliament to regulate and manage customs and excise duties, as well as to provide for the administration of related laws. In this context, the Act establishes a framework for the issuance of Tariff Concession Orders (TCOs) to provide tariff relief for certain goods. The explanatory statement for Tariff Concession Instrument No. 1105148, issued under the Customs Act, clarifies the process and criteria for making TCOs, particularly addressing the problem or gap in providing tariff concessions for specific goods that are not produced in Australia and for which there are no substitutable alternatives. The policy objective outlined in the explanatory statement is to facilitate the importation of goods by applying a lower rate of customs duty, thereby supporting businesses and potentially benefiting consumers by reducing the cost of these goods.
Scope and Application
The Tariff Concession Instrument No. 1105148, made under Part XVA of the Customs Act 1901, applies to specific plastic film slitter and/or unfolding and/or cutting machines that are the subject of a Tariff Concession Order (TCO). This instrument was initiated by an application from Cryovac Australia Pty Ltd on 07 February 2011, and it was issued by the Chief Executive Officer of Customs (CEO) on 02 May 2011, who found that no substitutable goods were produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia and operates under the Customs Act 1901, which is a federal statute. The Act ensures that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person regarding actions taken before the TCO was registered. The TCO is effective from the date the application was lodged, thus from 07 February 2011, and it provides a duty-free rate for the specified machinery, whereas the general rate of duty on these goods is 5%.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include section 269F, which allows for the application of a TCO, and section 269C, which sets out the criteria that must be met for the TCO to be granted. Section 269F provides that an application for a TCO may be made by a person to the Chief Executive Officer of Customs (the CEO), and section 269C requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these conditions are satisfied, the CEO must make a written order (a TCO) specifying the goods to which the concession applies.
Under this legislation, the CEO has specific obligations when considering an application for a TCO. According to section 269P(3), once the CEO is satisfied that the application meets the core criteria, they must issue a written order declaring the goods subject to the TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In this instance, no submissions were received in response to the notice published for TCO No 1105148.
In terms of penalties and consequences, the Customs Act 1901 does not explicitly outline penalties for breaching the requirements of a TCO. However, it is important to note that failure to comply with the conditions of the TCO or any related customs regulations may result in civil or criminal penalties under other provisions of the Customs Act 1901 or related legislation. These penalties can include fines, imprisonment, or other sanctions depending on the nature and severity of the breach.
The Tariff Concession Order No. 1105148 specifically relates to certain plastic film slitter and/or unfolding and/or cutting machines, which are declared as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This means that these machines are now subject to a rate of duty of free, as opposed to the general rate of 5%. Importantly, the TCO does not affect the rights of any person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the date of registration. Importers of these goods will benefit from the ability to apply for a refund of duty on goods imported since the TCO is taken to have come into force on 07 February 2011.