EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511036
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 polyurethane based cements on 19 August 2005.
Instrument
TCO No 0511036 was made on 04 November 2005. It declares that those certain polyurethane based cements 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. 0511036 is taken to have come into force on 19 August 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, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders allow for a reduced rate of customs duty on specific goods, provided certain criteria are met. The problem this legislation addresses is the need for flexibility in customs duty rates to support industries that may not have domestic production capabilities, ensuring they remain competitive in the global market. In this context, the policy objective is to encourage and protect local industries by reducing duties on imported goods where no suitable domestic alternatives exist. The CEO's role is to assess applications for TCOs, ensuring that the concessions do not undermine local production or impose unfair liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0511036, made under the Customs Act 1901, applies to the application process and approval of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation allows for the application of lower customs duty rates to specific goods, provided certain conditions are met, such as the absence of substitutable goods produced in Australia. The Act applies to entities and individuals seeking tariff concessions for goods, and the scope is limited to the goods specified in the application, particularly polyurethane-based cements in this case. The geographic reach of the Act is national, as it pertains to customs duties within Australia, governed by the Commonwealth. However, the Act excludes goods listed in section 269SJ, which are not eligible for tariff concessions. The application of the Act can be further defined or modified through subordinate instruments, such as regulations, which may specify additional criteria or processes for TCO applications.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S, which outline the criteria for making a Tariff Concession Order (TCO) and the process by which the Chief Executive Officer of Customs (CEO) must consider an application for such an order. Section 269C defines the core criteria that must be met for a TCO application to be considered valid, which requires that no substitutable goods are produced in Australia on the day the application is lodged (269C). If the CEO is satisfied that these core criteria are met, they must then make a written order declaring the goods to which the prescribed tariff item applies (269P(3)). The TCO comes into effect on the day the application is lodged (269S(1)), meaning that the concessional tariff rate applies retroactively from that date.
The obligations imposed by this Act primarily rest on the CEO of Customs, who is tasked with reviewing TCO applications and determining whether they meet the core criteria (269C). If an application is deemed to meet these criteria, the CEO must make a written TCO order (269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, although in this instance, no submissions were received (269K(1)).
Any breaches of the obligations outlined in the Act could potentially lead to legal consequences, although specific offences, penalties, or civil/criminal consequences are not explicitly stated in the provided text. However, failure to comply with the requirements for making a TCO could result in the TCO being deemed invalid, which would mean that the goods in question would not benefit from the concessional tariff rate. This could potentially lead to financial repercussions for the entity that applied for the TCO, as they would be liable for the full customs duty on the goods in question, rather than the reduced rate.