EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0511072
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 primers on 19 August 2005.
Instrument
TCO No 0511072 was made on 04 November 2005. It declares that those certain polyurethane based primers 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. 0511072 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 Tariff Concession Instrument No. 0511072 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions for specific goods that were not being produced domestically. This instrument, created by the Chief Executive Officer of Customs, provides for a lower rate of customs duty on certain polyurethane-based primers, responding to an application by Sun Metals Corporation Pty Ltd. The problem it aimed to resolve was the lack of domestic production of these specific goods, ensuring that Australian businesses could compete more effectively in the market without the burden of high import tariffs.
The enacting body is the Chief Executive Officer of Customs, operating under the authority of the Customs Act 1901. The policy objective, as outlined in the explanatory statement, is to facilitate the importation of goods that are not produced in Australia, thereby benefiting importers by allowing them to apply for duty refunds on goods imported since the instrument came into force on 19 August 2005. No submissions were received in opposition to the application, indicating broad support for the tariff concession.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply a lower rate of customs duty to specified goods, provided that the CEO determines the application meets the core criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The application process requires the CEO to evaluate if the goods in question are not prohibited under section 269SJ of the Act and if they meet the core criteria outlined in section 269C. Upon satisfying these conditions, the CEO issues a written TCO, which declares the applicable tariff item from the Customs Tariff Act 1995. The geographic scope of the Act is national, impacting all persons and entities involved in the importation of goods subject to TCOs within Australia. The commencement of a TCO is effective from the date the application is lodged, as stipulated in subsection 269S(1). This legislative framework ensures that the rights of importers are preserved and potentially enhanced by allowing them to apply for refunds of duty paid on goods imported since the TCO came into force, while explicitly safeguarding against any retroactive disadvantages or liabilities for third parties.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0511072, pursuant to the Customs Act 1901 (section 269F), pertain to the process for applying for a Tariff Concession Order (TCO). An application for a TCO can be submitted to the Chief Executive Officer (CEO) of Customs by a person (section 269F). If the application is not for goods specified in section 269SJ, the CEO must assess whether it meets the core criteria set out in section 269C. If the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269P(3)). The TCO declares that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, which may result in a lower rate of customs duty, or in this case, a rate of duty of free.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is not for goods specified in section 269SJ and must assess whether the application meets the core criteria (section 269C). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). In this instance, no submissions were received in response to the notice. The CEO must then make a written order if satisfied that the application meets the core criteria (section 269P(3)). The TCO, once made, does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person (subsection 269S(1)).
The Act also outlines consequences for non-compliance with its provisions. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach of the Act, it is reasonable to infer that non-compliance with the requirements and obligations set out in the Act may result in legal action. This could include civil penalties for incorrect duty payments or criminal penalties for fraudulent activities related to customs and excise. However, the precise nature and extent of these penalties would need to be determined by a legal professional or by reference to the specific provisions of the Customs Act 1901 and any related legislation.
In summary, Tariff Concession Instrument No. 0511072 provides for the application of lower customs duties on certain polyurethane based primers, subject to the core criteria being met. The CEO of Customs is responsible for assessing applications and making orders, while the Act also provides for public consultation and outlines the commencement date of the TCO. While the explanatory statement does not provide details on penalties for breach, it is likely that such breaches could lead to legal consequences.