EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508493
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.
Projex Group Pty Limited applied for a TCO in respect of certain extruded pvc sheets on 01 July 2005.
Instrument
TCO No 0508493 was made on 07 October 2005. It declares that those certain extruded pvc sheets 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. 0508493 is taken to have come into force on 01 July 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, enacted by the Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) may be issued to provide tariff concessions on certain goods. This Act was introduced to address the need for a systematic approach to tariff concessions, ensuring that they are granted in a transparent and consistent manner. The Act allows for the Chief Executive Officer of Customs to make TCOs, which provide a lower rate of customs duty on specified goods, subject to certain criteria being met. The primary objective, as stated in the explanatory statement, is to provide tariff concessions in a manner that ensures fairness and benefits importers without imposing any new liabilities or disadvantaging existing rights. The process involves a thorough assessment of applications to ensure that the goods in question are not being produced in Australia and that the concession would not undermine domestic production.
Scope and Application
The Tariff Concession Instrument No. 0508493 under the Customs Act 1901 applies to the concession of customs duty on certain extruded PVC sheets. This instrument pertains specifically to the application made by Projex Group Pty Limited, which was processed by the Chief Executive Officer of Customs. The instrument declares that the specified goods will be subject to a free rate of duty, down from the general rate of 5%, provided that no substitutable goods are produced in Australia in the ordinary course of business. This concession applies to goods imported after the date the application was lodged, which was 01 July 2005. The instrument’s geographic reach is national, impacting importers across Australia. There were no submissions opposing the Tariff Concession Order, and the order came into effect on the date the application was lodged. Notably, the order does not affect any pre-existing rights or impose any liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0508493 under the Customs Act 1901 (section 269C, 269B, 269P(3)) establish the framework for applying for and granting Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). If an application for a TCO is made and the CEO is satisfied that the application meets the core criteria, such as no substitutable goods being produced in Australia on the date of application, a TCO will be made. This TCO will declare that the goods specified in the application are subject to a reduced rate of customs duty. In this instance, TCO No. 0508493 was issued on 07 October 2005 for certain extruded PVC sheets, applying item 50 of Schedule 4 to the Customs Tariff Act 1995, which results in a duty-free status for these goods.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must assess TCO applications against the core criteria specified in the Act. The CEO must also ensure that a notice is published in the Gazette once an application is accepted as valid, inviting submissions from any interested parties who may have reasons why the TCO should not be granted. Additionally, the Act requires the CEO to consider any submissions received and decide whether to make the TCO. For applicants, such as Projex Group Pty Limited in this case, the obligation is to provide sufficient information to satisfy the CEO that the core criteria for a TCO are met.
Should any party fail to comply with the requirements or obligations outlined in the Act, consequences may arise. While the explanatory statement does not detail specific offences or penalties for breaches of the Act, breaches of similar provisions under the Customs Act 1901 may lead to civil or criminal penalties. For example, failure to comply with the Act could result in fines or other penalties as prescribed by law, depending on the nature and severity of the breach. The CEO also retains the discretion to refuse an application if it does not meet the criteria or if there are valid reasons to do so.