EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509604
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.
Polymers International Australia Pty Ltd applied for a TCO in respect of certain Cast Acrylic on 20 July 2005.
Instrument
TCO No 0509604 was made on 30 September 2005. It declares that those certain Cast Acrylic 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 0%.
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. 0509604 is taken to have come into force on 20 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 was enacted by the Australian Parliament to provide for the regulation of customs and excise, including the imposition of duties and the control of the movement of goods across Australia's borders. The Act, as amended, introduces a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This scheme addresses the gap in the legislative framework by allowing for the reduction of customs duty on certain goods, thereby promoting trade and economic efficiency. The policy objective is to provide relief to importers and consumers by reducing the cost of imported goods, provided that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0509604, made in 2005, is an example of how this scheme operates in practice, providing a zero percent duty rate on certain Cast Acrylic goods as of the date the application was lodged.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which applies reduced rates of customs duty to specified goods. This legislation applies to any person or entity that seeks to import goods eligible for a TCO, provided these goods are not specified in section 269SJ of the Act as those ineligible for concession. The application of a TCO is contingent on the core criteria outlined in sections 269C, 269B, and 269D of the Act, ensuring that the goods subject to the TCO are not substitutable by products manufactured in Australia. The geographic reach of the Act extends nationally across Australia as a Commonwealth legislation. The Act allows for the application to be further defined or restricted through subordinate instruments, though in this instance, no exclusions or exemptions have been applied to the specific TCO No. 0509604 concerning certain Cast Acrylic, which now benefits from a zero percent duty rate. The commencement of the TCO is deemed to be effective from the date of the application, 20 July 2005, without retroactive disadvantage to any party except the Commonwealth, ensuring that importers can apply for duty refunds from this date forward.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0509604 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269F, 269P, 269K, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria, which are outlined in section 269C, the CEO is required to make a TCO. Section 269B defines terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are critical in determining whether the application meets the core criteria. Section 269P(3) mandates that if the CEO is satisfied with the application, a written order (TCO) must be made, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties, while section 269S specifies that the TCO comes into force on the date the application was lodged.
The Customs Act 1901 imposes several obligations on the parties involved. The CEO must ensure that applications for TCOs are assessed against the core criteria, specifically that no substitutable goods are produced in Australia at the time the application is lodged. If the application meets these criteria, the CEO is obligated to make a TCO. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested party to lodge submissions if they believe the TCO should not be made. Once a TCO is issued, importers of the specified goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
Any breach of the obligations imposed by the Customs Act 1901 may result in civil or criminal consequences. While specific offences, penalties, or consequences for breach are not detailed in the explanatory statement, the Act generally allows for enforcement actions against those who do not comply with its provisions. This may include fines, imprisonment, or other penalties as determined by the courts. The maximum penalties would depend on the specific breach and applicable laws at the time of the offence.