EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512930
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.
BBZ Australia Pty Ltd applied for a TCO in respect of certain acrylates on 22 December 2005.
Instrument
TCO No 0512930 was made on 17 March 2006. It declares that those certain acrylates 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. 0512930 is taken to have come into force on 22 December 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 amended to include the Tariff Concession Orders (TCO) scheme, which was enacted to provide relief from customs duty on certain imported goods under specific circumstances. The Act was introduced to address the gap in providing tariff concessions for goods that are not produced domestically and for which no suitable substitute is available in Australia. The enacting body, the Parliament of Australia, aimed to facilitate the import of goods that would otherwise be prohibitively expensive due to high customs duty rates, thus encouraging trade and economic growth. This mechanism allows for a more competitive marketplace and better access to a diverse range of products for Australian consumers and businesses. The policy objective is to ensure that the Australian market is supplied with goods at a reasonable cost while maintaining a fair and balanced approach to trade and industry.
Scope and Application
The Tariff Concession Instrument No. 0512930 under the Customs Act 1901 applies to the goods specified in the instrument, in this case certain acrylates, and is intended to benefit the applicant, BBZ Australia Pty Ltd, by providing a concession on the rate of customs duty applicable to these goods. The Act applies to any person or entity that seeks to import these goods and aims to provide a tariff concession if specific conditions are met, such as the absence of substitutable goods produced in Australia at the time of the application. This instrument is issued under the authority of the Chief Executive Officer of Customs and has a national reach across Australia, impacting the importation process for the specified goods. It is important to note that the concession does not extend to goods listed in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. The application of this Act may be further refined or expanded through subordinate instruments, which can specify additional conditions or categories of goods eligible for tariff concessions.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0512930 (the Instrument) under the Customs Act 1901 (the Act) are sections 269C, 269P, and 269S. Section 269C (1) of the Act sets out the core criteria that must be met for a Tariff Concession Order (TCO) to be made by the Chief Executive Officer of Customs (the CEO). According to section 269P (3) of the Act, if the CEO is satisfied that the application meets the core criteria, they must make a written order (the 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. Section 269S (1) of the Act states that a TCO is to be taken to have come into force on the day on which the application for the TCO was lodged. The Instrument declares that certain acrylates are goods to which item 50 of Schedule 4 to the Tariff applies, with a rate of duty of 0%, because the CEO was satisfied that no substitutable goods were produced in Australia.
The obligations imposed on the parties governed by the Act primarily revolve around the application and assessment of TCOs by the CEO. Section 269F of the Act allows a person to apply to the CEO for a TCO in respect of goods. Section 269SJ of the Act sets out those goods that cannot be subject to a TCO, and 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 269K(1) of the Act mandates the CEO to publish a notice in the Gazette, inviting 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, which indicates that the application process was transparent and open to public input.
In terms of penalties or consequences for breach, the Act does not explicitly state any offences, penalties, or civil/criminal consequences for non-compliance with the provisions of the Instrument. However, the Act does provide for the possibility of judicial review of decisions made by the CEO in relation to TCOs. This means that any party who believes that a decision made by the CEO is unlawful, irrational, or procedurally unfair can seek a review of that decision by a court. Such judicial review can result in the setting aside of the decision, or the making of an order directing the CEO to make a different decision. The potential for judicial review serves as a deterrent against non-compliance with the provisions of the Instrument and the Act.