EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504792
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.
Arkema Pty Ltd applied for a TCO in respect of certain co-polyamides on 27 April 2005.
Instrument
TCO No 0504792 was made on 9 September 2005. It declares that the certain co-polyamides 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. 0504792 is taken to have come into force on 27 April 2005.
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. 0504792, enacted in 2005, pertains to the Customs Act 1901, which allows for the establishment of Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods. This instrument addresses the need to provide tariff relief on goods that are not produced in Australia and do not have substitutable alternatives locally. The Tariff Concession Instrument was introduced to facilitate applications from entities such as Arkema Pty Ltd for tariff concessions on specific goods, ensuring that such applications are processed efficiently under the legislative framework provided by the Customs Act 1901. The policy objective is to promote trade by reducing the cost of importing certain goods, thereby encouraging their use and availability in the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCO) which can be issued by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty on goods specified in the TCO. This legislative framework applies to any person who can apply to the CEO for a TCO 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 application of the Act is primarily concerned with the reduction of customs duties on goods that are not substitutable by goods produced in Australia. The application of a TCO is contingent upon the CEO being satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as outlined in section 269C. The geographic reach of this legislation is national, as it applies across Australia and pertains to imports subject to Australian customs regulations. The TCO No. 0504792, made on 9 September 2005, is an example of how this Act operates, reducing the duty on certain co-polyamides from 5% to free, based on the CEO's determination that no substitutable goods were produced in Australia. The commencement of a TCO is deemed to be the date on which the application for the TCO was lodged, ensuring that the rights of importers are protected and potentially benefiting them by allowing duty refunds for imports made since the effective date of the TCO.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0504792 under the Customs Act 1901 (sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S) govern the process and criteria for making a Tariff Concession Order (TCO). Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods are not specified in section 269SJ. The CEO must then determine if the application meets the core criteria set out in section 269C, which includes ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269B). If these criteria are met, a TCO is made under section 269P(3), declaring that the goods are subject to a lower rate of customs duty. This particular TCO, No. 0504792, applies to certain co-polyamides and specifies that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved. The CEO of Customs must accept a valid TCO application and determine whether it meets the core criteria. If the criteria are met, the CEO must make a written TCO. Arkema Pty Ltd, the applicant, must ensure their application meets all specified conditions, including that no substitutable goods were produced in Australia. The CEO is also required to publish a notice in the Gazette inviting submissions on the application, as per section 269K(1). This process ensures transparency and allows interested parties to provide input before a TCO is made.
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. While the explanatory statement does not specify particular offences or penalties for breaching the TCO requirements, the general legal framework under the Customs Act could impose civil or criminal penalties for non-compliance. The exact penalties would depend on the nature and severity of the breach, and could include fines or imprisonment. Additionally, the Act ensures that the rights of importers are beneficially affected and that no liabilities are imposed on persons other than the Commonwealth in respect of actions taken before the TCO comes into force.