EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508304
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.
Sun Metals Corporation Pty Ltd applied for a TCO in respect of certain polypropylene piping and/or tubing on 24 June 2005.
Instrument
TCO No 0508304 was made on 11 November 2005. It declares that those certain polypropylene pipings and/or tubings 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 10%. 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. 0508304 is taken to have come into force on 24 June 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 Customs Act 1901 was enacted by the Australian Parliament to provide a framework for the administration of customs and excise duties. The Act allows for the creation of Tariff Concession Orders (TCOs) to provide relief from customs duty on specific goods under certain conditions. This legislative instrument addresses the gap in the tariff structure by enabling the Chief Executive Officer of Customs to make decisions that can lower the duty on goods where there are no substitutable products being produced domestically. The policy objective is to promote trade and industry by reducing the cost of imported goods, thereby encouraging economic growth and competitive pricing in the market. In this context, Tariff Concession Instrument No. 0508304 was introduced to provide tariff concessions for certain polypropylene piping and/or tubing, reducing the duty from 10% to free, based on the absence of substitutable goods produced in Australia.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to entities and individuals seeking lower customs duty rates on specific goods, provided these goods are not specified in section 269SJ of the Act, which lists items ineligible for tariff concessions. The Act mandates that the CEO must assess an application against core criteria outlined in sections 269C and 269F, ensuring that no substitutable goods are produced in Australia as per section 269D and in the ordinary course of business as defined in section 269E. If the CEO determines that a TCO application meets these criteria, they are required to issue a written order that specifies the applicable tariff item under Schedule 4 of the Customs Tariff Act 1995. This instrument affects the rights of importers by allowing them to apply for a refund of duty on imported goods from the date the TCO is deemed to have come into force, as per subsection 269S(1) of the Act. The TCO does not impose liabilities on any person and does not affect the rights of individuals or entities other than the Commonwealth regarding actions taken before the registration date of the TCO.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0508304, establishes a process through which the Chief Executive Officer of Customs (CEO) can grant Tariff Concession Orders (TCO) to certain goods. These TCOs provide a lower rate of customs duty for the specified goods. An application for a TCO can be submitted under section 269F of the Act, provided the goods are not those listed in section 269SJ, which are ineligible for tariff concessions. The CEO must evaluate the application against the core criteria specified in sections 269C, 269B, and 269D of the Act, particularly focusing on whether substitutable goods are produced in Australia in the ordinary course of business. If the CEO determines that the application meets these criteria, they are required to issue a written TCO under section 269P(3) of the Act.
The obligations imposed by the Customs Act 1901 and the Tariff Concession Instrument No. 0508304 on the parties involved primarily concern the application process and the conditions for granting a TCO. Applicants must ensure their submissions are valid and that the goods they seek concessions for meet the eligibility criteria. The CEO is obligated to evaluate each application meticulously, considering the production of substitutable goods in Australia and whether the goods can be put to a similar use. Once the CEO decides to issue a TCO, they must publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the concession should not be granted, as stipulated in subsection 269K(1) of the Act.
Breaching the provisions of the Customs Act 1901 or the conditions of a Tariff Concession Order can result in both civil and criminal consequences. Under the Act, the CEO has the authority to enforce compliance and can impose penalties for non-compliance with the terms of a TCO. While the maximum penalties are not explicitly stated in the Explanatory Statement, they could include fines, imprisonment, or other civil penalties as deemed appropriate under the Act. It is critical for all parties, including applicants, importers, and the CEO, to adhere to the established guidelines and procedures to avoid these repercussions.
The Tariff Concession Instrument No. 0508304 specifically addresses polypropylene piping and/or tubing, declaring that these goods are subject to a free rate of duty as of 24 June 2005, when the application was lodged. The CEO’s decision to issue this TCO was based on the absence of substitutable goods produced in Australia at that time, as required by section 269C of the Act. Importers of these goods can apply for a refund of any duty paid since the effective date of the TCO under paragraph 126(1)(r) of the Regulations. This instrument ensures that the rights of importers are protected and that no new liabilities are imposed on any person for actions taken before the TCO was registered.