EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113077
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.
Qenos Pty Ltd applied for a TCO in respect of certain plastic extrusion chunk cutting rotary feeders on 20 April 2011.
Instrument
TCO No 1113077 was made on 18 July 2011. It declares that those certain plastic extrusion chunk cutting rotary feeders 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. 1113077 is taken to have come into force on 20 April 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, enacted by the Australian Parliament, provides a framework for the regulation of imports and exports through the imposition of customs duty. One specific mechanism within this legislative framework is the Tariff Concession Order (TCO), which allows for the reduction or exemption of customs duty on certain goods, thereby addressing the economic and competitive needs of Australian businesses. The Tariff Concession Instrument No. 1113077, made under the authority of the Customs Act 1901, aims to provide tariff concessions to specific goods by reducing the duty on certain plastic extrusion chunk cutting rotary feeders. This instrument was introduced to ensure that Australian businesses can remain competitive by accessing these goods at a lower cost, thereby supporting local industries and economic activity. The policy objective is to facilitate the efficient operation of trade and commerce by providing tariff relief where appropriate.
Scope and Application
The Tariff Concession Instrument No. 1113077 is a specific legislative measure under Part XVA of the Customs Act 1901, designed to grant tariff concessions on certain imported goods. This Act applies to entities such as Qenos Pty Ltd, which applied for a tariff concession order (TCO) for their plastic extrusion chunk cutting rotary feeders. The instrument allows for a lower rate of customs duty, or in this case, a complete waiver of duty, on the specified goods provided they meet the core criteria set out in the Act, namely, that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The Act's reach extends across the Commonwealth of Australia, with its provisions enforced by the Chief Executive Officer of Customs. The TCO is effective from the date the application was made, 20 April 2011, and does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person. Notably, the Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which excludes certain goods from tariff concessions.
Key Provisions
The main operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 1113077, are sections 269C, 269P, and 269SJ (subsections 269K(1) and 269S(1) are also relevant). Section 269F allows for the application of a Tariff Concession Order (TCO) for specific goods, provided the goods are not listed in section 269SJ. Section 269C outlines the core criteria for a TCO, which must be met to ensure that no substitutable goods are produced in Australia. If the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must issue a TCO, as per section 269P(3). This order specifies the reduced duty rate for the goods in question, as defined in Schedule 4 of the Customs Tariff Act 1995. The TCO also mandates that any notice regarding the TCO application is published in the Gazette, inviting submissions from interested parties, as per section 269K(1). Finally, section 269S(1) stipulates that the TCO comes into force on the day the application was lodged.
The obligations imposed by this Act on parties include the requirement for applicants to ensure their applications meet the core criteria outlined in section 269C. The CEO must review the application to verify that no substitutable goods are produced in Australia and, if satisfied, proceed to issue a TCO. The CEO must also publish a notice in the Gazette, as per section 269K(1), allowing for public submissions. Any submissions received must be considered before the TCO is finalised. Importers of the goods affected by the TCO must be aware of their rights to apply for a refund of duty under paragraph 126(1)(r) of the Regulations if they imported the goods since the TCO came into force.
Breaches of the provisions in the Customs Act 1901 can lead to both civil and criminal consequences. For instance, incorrect claims for tariff concessions could be seen as evading customs duty, which is a serious offence under the Act. Penalties for such offences can include fines and imprisonment. The exact penalties depend on the severity of the breach and are outlined in other sections of the Customs Act and related legislation. For example, fraudulent claims could result in fines of up to $22,000 or imprisonment for up to two years, or both, as per section 217 of the Customs Act. Additionally, the CEO may impose administrative penalties for non-compliance with the regulations governing the TCO process.