EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139430
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.
Foamex Group applied for a TCO in respect of certain recycling line on 28 November 2011.
Instrument
TCO No 1139430 was made on 15 February 2012. It declares that those certain recycling 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. 1139430 is taken to have come into force on 28 November 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 Tariff Concession Instrument No. 1139430, enacted in 2012, amends the Customs Act 1901 to provide for tariff concessions on certain recycling lines imported by Foamex Group. The objective of this legislation is to facilitate the importation of specific goods by reducing the customs duty rate from the general rate of 5% to zero, provided that no substitutable goods are produced in Australia. The instrument was created in response to an application by Foamex Group for tariff concessions on certain recycling lines, which was lodged on 28 November 2011. The instrument was approved and published by the Chief Executive Officer of Customs (CEO) under section 269P(3) of the Customs Act 1901, after it was determined that the application met the core criteria and no submissions were received in opposition to the concession. The policy objective of the Tariff Concession Instrument is to support the importation of goods that are not produced domestically, thereby benefiting importers and potentially encouraging the use of recycled materials in Australia.
The Tariff Concession Instrument No. 1139430 was introduced by the CEO under the authority of the Customs Act 1901, and it came into effect on the date the application was lodged, 28 November 2011. The instrument ensures that the tariff concession does not affect any rights or impose liabilities on persons other than the Commonwealth in relation to actions taken prior to the date of registration. Importers of the specified recycling lines will benefit from the tariff concession and may apply for a refund of duty on goods imported since the commencement date of the concession. The Tariff Concession Instrument aims to facilitate the importation of specific goods by reducing customs duty, provided that no substitutable goods are produced in Australia.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. A TCO can be applied for by any person in respect of goods, provided that these goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must consider whether the application meets the core criteria, which are detailed in sections 269C, 269B, 269D, 269E, and 269P(3) of the Act, particularly focusing on whether substitutable goods are produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO is required to make a TCO, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. In the case of TCO No. 1139430, the CEO was satisfied that no substitutable goods were produced in Australia, and hence, granted a concession that resulted in a free rate of duty on certain recycling line goods, previously subject to a general rate of duty of 5%. The TCO is effective from the date the application was lodged, and it does not disadvantage any person or impose liabilities on anyone for actions taken prior to the registration of the order. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation include sections 269C, 269F, 269P, and 269S, which collectively outline the process and criteria for making a Tariff Concession Order (TCO) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C specifies that the CEO must determine whether the application meets the core criteria, which is when no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, the CEO is required under section 269P(3) to issue a written order (TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which are those that cannot be subject to a TCO. Additionally, the CEO must consider whether the application meets the core criteria outlined in section 269C. If the criteria are satisfied, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions against the TCO, as required by subsection 269K(1). In the case of TCO No. 1139430, no submissions were received, and the CEO proceeded to issue the order.
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal consequences. Although the explanatory statement does not explicitly detail penalties for non-compliance, the Act generally provides for penalties under various sections, including fines and imprisonment, depending on the nature and severity of the breach. The maximum penalties can vary, but they are typically outlined in the relevant sections of the Act and may be subject to the discretion of the court.
In summary, TCO No. 1139430, made under section 269P(3) of the Customs Act 1901, declares that certain recycling lines are subject to a lower rate of customs duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO must ensure that the application meets the core criteria and that the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date. Importers can benefit from this concession by applying for a refund of duty on goods imported since the TCO's effective date. Non-compliance with the Act may result in penalties as prescribed under the relevant sections.