EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1124555
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.
Hester Holding Pty Ltd applied for a TCO in respect of certain plastic pipe manufacturing line on 25 July 2011.
Instrument
TCO No 1124555 was made on 12 October 2011. It declares that those certain plastic pipe manufacturing 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. 1124555 is taken to have come into force on 25 July 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 Parliament of Australia, established a framework under which Tariff Concession Orders (TCOs) could be issued by the Chief Executive Officer of Customs to reduce customs duty rates on certain goods. The primary gap it aimed to address was the need to provide tariff relief to industries that could not produce certain goods domestically, thereby fostering economic growth and competitiveness. TCO No. 1124555, made on 12 October 2011, addresses the application by Hester Holding Pty Ltd for tariff concessions on certain plastic pipe manufacturing lines, granted because no substitutable goods were produced in Australia at the time of application. This concession reduces the duty from the general rate of 5% to free, effective from the date of application, 25 July 2011. The process involved public consultation, which in this instance did not elicit any submissions opposing the concession.
Scope and Application
The Tariff Concession Instrument No. 1124555, made under Part XVA of the Customs Act 1901, applies to goods specified in the instrument, which in this instance are certain plastic pipe manufacturing lines. The application of this instrument is limited to the particular goods that are subject to the concession, and it does not extend to other goods unless specifically included in a subsequent order. The scope of the Act encompasses any person or entity that imports the specified goods and seeks to benefit from the lower rate of customs duty as outlined in the instrument. The geographic reach of the Act is national, as it pertains to the application of customs duties across Australia. The Act provides that the instrument does not affect the rights of any person, other than the Commonwealth, as at the date of registration in a manner that would disadvantage them or impose liabilities for actions taken prior to the registration date. However, it does allow for the beneficial effect of rights for importers who can apply for a refund of duty on goods imported since the effective date of the instrument. The Act may be extended or restricted through subordinate instruments, although this particular instrument does not specify such extensions or restrictions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1124555 (section 269P) under the Customs Act 1901 involve the application and approval process for Tariff Concession Orders (TCOs). Under section 269F, a person may apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, they must make a written order declaring that the goods are subject to a TCO. This process is further detailed in section 269P(3) where it states that if the CEO is satisfied that an application meets the core criteria, they must declare that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this Act on the parties or entities it governs include the requirement for applicants to ensure that their applications meet the criteria specified in section 269C. Specifically, the applicant must demonstrate that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO, in turn, has an obligation to evaluate the application against these criteria and make a decision accordingly. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application (section 269K(1)), inviting any interested parties to lodge submissions if they believe the TCO should not be made.
There are no direct offences or penalties specified in the Tariff Concession Instrument No. 1124555. However, any breaches of the Customs Act 1901, such as providing false information in an application, could result in criminal or civil consequences. Penalties for such breaches can include fines and imprisonment as stipulated in the relevant sections of the Customs Act. The specific penalties would depend on the nature and severity of the breach, as detailed in the Act.
Overall, the Tariff Concession Instrument No. 1124555 provides a framework for the application and approval of TCOs, ensuring that the process is transparent and allows for public input. The obligations on both applicants and the CEO are clearly defined, with the aim of facilitating the concession of customs duties on eligible goods.