EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0410990
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.
Australian Vinyls Corporation Ltd applied for a TCO in respect of certain pvc impact modifiers on 21 October 2004.
Instrument
TCO No 0410990 was made on 4 January 2005. It declares that those certain pvc impact modifiers 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 3%.
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.0410990 is taken to have come into force on 21 October 2004.
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. 0410990, enacted in 2005 under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods that are not produced domestically, thereby encouraging importation and potentially stimulating economic activity. The instrument was introduced to facilitate tariff reductions for goods, such as certain PVC impact modifiers, for which there are no Australian-produced alternatives, thus benefiting importers by lowering their duty costs and potentially enhancing their competitiveness. This instrument is an administrative measure implemented by the Chief Executive Officer of Customs, in line with the Act's provisions, and aims to ensure that tariff concessions are granted fairly and transparently, following the necessary consultation processes and without imposing undue burdens on stakeholders.
Scope and Application
The Customs Act 1901 applies to persons and entities involved in the importation of goods into Australia, specifically those who may apply for Tariff Concession Orders (TCOs) concerning customs duty rates. This Act is of Commonwealth jurisdiction and applies to all goods imported into Australia, unless specified otherwise in section 269SJ of the Act. Section 269C stipulates that a TCO application will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The scope of the Act extends to the creation of TCOs through subordinate instruments, such as Tariff Concession Instrument No. 0410990, which was made on 4 January 2005 for certain PVC impact modifiers, lowering the duty rate from 5% to 3%. The Act also mandates that the Chief Executive Officer of Customs must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made, although in this instance, no submissions were received.
Key Provisions
The main sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269B, 269D, 269E, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the application meets the core criteria set out in section 269C, the CEO must make a TCO (section 269P(3)), which specifies the goods and the rate of duty.
The obligations and requirements imposed by the Act include the CEO's duty to consider applications for TCOs and to determine if they meet the core criteria. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers the TCO should not be made (subsection 269K(1)). If no submissions are received, the TCO can be made. The Act also specifies that a TCO is deemed to have come into force on the date the application was lodged, and it does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
Section 269C of the Customs Act 1901 stipulates that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This requirement is crucial for determining the eligibility of the goods for a lower rate of customs duty. Failure to meet these criteria could result in the application being rejected by the CEO.
The Act does not explicitly state offences or penalties for breach of its provisions regarding TCOs. However, any failure by the CEO to properly consider an application or to follow the legislative requirements could potentially lead to administrative or judicial review, with any resulting liabilities or penalties being determined by the courts or relevant administrative bodies. Importers who benefit from a TCO may face penalties if they fail to comply with other customs-related obligations, such as providing accurate declarations or paying applicable duties and taxes.
The Act's provisions ensure that the process for granting TCOs is transparent and fair, with adequate opportunities for stakeholders to provide input. The rights of importers are protected, as they can apply for a refund of duty on goods imported since the TCO came into effect. The Act's framework for TCOs aims to balance the interests of manufacturers, importers, and the government by providing tariff relief where appropriate.