EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514833
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.
Pirelli Telecommunication Cables and Systems Pty Ltd applied for a TCO in respect of certain Ethylene Vinyl Acetate Copolymers on 24 October 2005.
Instrument
TCO No 0514833 was made on 16 January 2006. It declares that those certain Ethylene Vinyl Acetate Copolymers 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. 0514833 is taken to have come into force on 24 October 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. 0514833, enacted under the Customs Act 1901, addresses the issue of tariff concessions for certain Ethylene Vinyl Acetate Copolymers by providing a reduced rate of customs duty for these goods. This instrument was introduced to ensure that the application process for tariff concessions is streamlined and efficient, allowing businesses to benefit from lower duty rates if certain conditions are met. The Customs Act 1901 provides the legislative framework for the creation of Tariff Concession Orders (TCOs), and this specific TCO was made by the Chief Executive Officer of Customs following an application from Pirelli Telecommunication Cables and Systems Pty Ltd on 24 October 2005. The instrument came into force on the same date, 24 October 2005, and does not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities in respect of actions taken prior to the registration.
The policy objective underpinning this instrument is to facilitate the import of specific goods by reducing their customs duty rates, thereby potentially lowering costs for businesses and consumers. This measure is intended to support Australian industry by ensuring that certain goods can be imported at a reduced tariff, provided that no substitutable goods are being produced domestically. The process involves careful consideration of the application by the CEO of Customs, ensuring that the concession aligns with the broader economic objectives of the Customs Act 1901. No submissions were received in opposition to this TCO, indicating broad acceptance of the tariff reduction for the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0514833 under the Customs Act 1901 provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods. This instrument applies to specific goods, in this instance certain Ethylene Vinyl Acetate Copolymers, that are subject to an application by a person or entity, such as Pirelli Telecommunication Cables and Systems Pty Ltd, which sought and received a concession in this instance. The instrument is effective in reducing the duty rate on these goods from 5% to 0%, provided that the application meets the core criteria, which include the absence of substitutable goods being produced in Australia. This instrument has a national reach, as it is part of the Commonwealth's customs legislation. The instrument does not apply to goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. Furthermore, the instrument is effective from the date the application is lodged, which in this case was 24 October 2005, and does not affect the rights of any person in respect of anything done before that date. The instrument's application may be extended or restricted through subordinate instruments, although no such extensions or restrictions are noted here.
Key Provisions
Section 269C of the Customs Act 1901 outlines the core criteria that a Tariff Concession Order (TCO) application must meet. For an application to be successful, the Chief Executive Officer (CEO) of Customs must be satisfied that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This criterion is crucial for determining whether the tariff concession should be granted. Section 269D defines "goods produced in Australia," while section 269E defines "ordinary course of business." Moreover, section 269E further clarifies that "substitutable goods" are those produced in Australia that can be used in a manner corresponding to the goods specified in the TCO application.
The obligations imposed by the Customs Act 1901 on the CEO include reviewing the TCO application to ensure it complies with the core criteria set out in section 269C. Once the CEO determines that the application meets these criteria, they must make a written order (TCO) under section 269P(3) of the Act, declaring that the goods in question are subject to a prescribed tariff item specified in the order. In this case, the CEO determined that the Ethylene Vinyl Acetate Copolymers in question were not produced in Australia in the ordinary course of business, and thus granted the TCO, resulting in a zero per cent duty rate for these goods.
The Customs Act 1901 provides for specific penalties and consequences in the event of a breach. For instance, subsection 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the making of a TCO. Failure to comply with this requirement could result in the TCO being subject to legal challenge. Additionally, any misuse of a TCO, such as falsely claiming eligibility for the concession, could lead to criminal penalties under section 269X of the Act. The Act does not specify a maximum penalty but states that the offence is subject to the penalties provided by the Crimes Act 1914, which could include fines or imprisonment.