EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1115196
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.
Visy Industries Pty Ltd applied for a TCO in respect of certain plastic cup inspection line on 16 May 2011.
Instrument
TCO No 1115196 was made on 01 August 2011. It declares that those certain plastic cup inspection line 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. 1115196 is taken to have come into force on 16 May 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, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This Act aims to address the need for concessional customs duties on specific imported goods that are not produced domestically or for which no suitable domestic substitutes are available. The explanatory statement for Tariff Concession Instrument No. 1115196 details that the CEO, upon receiving an application from Visy Industries Pty Ltd for a TCO on certain plastic cup inspection lines on 16 May 2011, was satisfied that the application met the core criteria. As a result, the CEO issued Instrument TCO No. 1115196 on 1 August 2011, reducing the duty on these goods from the general rate of 5% to free, effective from the date of the application. The policy objective is to facilitate the importation of goods that are essential and not domestically produced, thereby benefiting importers by potentially allowing duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals and entities seeking lower rates of customs duty on specific goods by applying for a TCO. The legislation targets industries involved in the import of goods that meet the criteria for tariff concessions, essentially benefiting importers who can now access goods at a reduced duty rate. The application of this Act is Commonwealth-wide, affecting entities and individuals across Australia. Notably, certain goods specified in section 269SJ of the Act are excluded from TCOs. The scope of the Act can be further extended or restricted through subordinate instruments, which may detail additional criteria or conditions for TCOs. The Explanatory Statement for Tariff Concession Instrument No. 1115196 clarifies that the TCO is effective from the date the application is lodged and does not retroactively affect rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation, specifically sections 269F, 269C, and 269P, outline the process for applying for and obtaining a Tariff Concession Order (TCO). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application meets the core criteria stipulated in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO must make a written order, i.e., a TCO, as per section 269P(3). This TCO will then apply a lower rate of customs duty to the specified goods.
The Act imposes several obligations on parties involved in the application process. For instance, section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice must include an invitation for any person who believes the TCO should not be made to submit a submission to the CEO. Additionally, under section 269S(1), a TCO is considered to come into force on the day the application for the TCO was lodged. This means that the obligations and rights associated with the TCO commence on that date.
The legislation also addresses the consequences of breaching its provisions. While specific offences, penalties, or civil and criminal consequences for breach are not detailed in the provided text, it is clear that the Act aims to ensure that the rights of importers are beneficially affected and that no liabilities are imposed on any person in respect of actions taken before the TCO's effective date. The rights of importers, as outlined in paragraph 126(1)(r) of the Regulations, allow them to apply for a refund of duty on goods imported since the TCO's effective date. This provision underscores the importance of adhering to the legislative requirements to avoid any adverse implications.