EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511039
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 unsaturated polyester based primers and bonding agents on 19 August 2005.
Instrument
TCO No 0511039 was made on 04 November 2005. It declares that those certain unsaturated polyester based primers and bonding agents 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. 0511039 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, as amended, introduced a scheme to allow for Tariff Concession Orders (TCOs) which provide reduced customs duty rates for specific goods. Enacted by the Parliament of Australia, the Act aims to promote trade efficiency and economic benefits by providing concessions on certain goods, ensuring they are accessible and competitively priced. The Tariff Concession Instrument No. 0511039, made on 4 November 2005, is an example of this mechanism in action, providing a duty-free rate for certain unsaturated polyester based primers and bonding agents, following an application by Sun Metals Corporation Pty Ltd. This instrument ensures that the rights of importers are protected, allowing them to apply for refunds of duty on goods imported since the TCO's effective date, without imposing any liabilities on other parties.
Scope and Application
The Tariff Concession Instrument No. 0511039, made under the Customs Act 1901, applies specifically to certain unsaturated polyester based primers and bonding agents as sought by Sun Metals Corporation Pty Ltd. The Act facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, granting lower rates of customs duty on goods specified in such orders, provided they meet specific criteria. This instrument was enacted to ensure that no substitutable goods were being produced in Australia in the ordinary course of business, which was a condition necessary for the concession to be granted. The geographic and jurisdictional reach of this Act is national, as it operates under the Commonwealth's customs laws. Any exclusions or exemptions are strictly defined within the Act, ensuring that only goods that meet the specified criteria are eligible for tariff concessions. The application of this Act is not restricted by any thresholds but relies on the specific conditions outlined within the Customs Act 1901 and its subordinate instruments.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0511039 include sections 269F, 269C, 269B, and 269P(3) of the Customs Act 1901. Section 269F allows for an application to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods, provided these goods are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria under section 269C, meaning no substitutable goods were produced in Australia on the day the application was lodged, they must make a written order declaring the goods to which the TCO applies. This declaration specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995. The CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as per subsection 269K(1).
The obligations imposed by this legislation on the parties it governs include the requirement for applicants to ensure that their applications are not in respect of goods specified in section 269SJ and that they meet the core criteria outlined in section 269C. The CEO must review applications against these criteria, make an order if the criteria are met, and publish notices inviting submissions. The CEO’s decision to make a TCO is contingent upon satisfying themselves that no substitutable goods are produced in Australia. Once the TCO is made, it has retroactive effect from the date the application was lodged under subsection 269S(1).
The legislation also outlines consequences for breaches. Although the Explanatory Statement does not specify offences or penalties, the Customs Act 1901 generally provides for various civil and criminal penalties for breaches. Under section 150 of the Customs Act, penalties for breaches may include fines up to the maximum penalties stipulated in the Act, depending on the nature and severity of the breach. For instance, offences involving fraud or misrepresentation can attract significant penalties, including fines and imprisonment. Importers and exporters must ensure compliance to avoid these potential penalties.