EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514905
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.
National Starch & Chemical Pty Ltd applied for a TCO in respect of certain Ethylene Vinyl Acetate Copolymer/Terpolymer Aqueous Dispersions on 27 October 2005.
Instrument
TCO No 0514905 was made on 16 January 2006. It declares that those certain Ethylene Vinyl Acetate Copolymer/Terpolymer Aqueous Dispersions 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. 0514905 is taken to have come into force on 27 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. 0514905 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on certain imported goods, specifically Ethylene Vinyl Acetate Copolymer/Terpolymer Aqueous Dispersions, by reducing the customs duty rate from 5% to 0%. This was achieved by the Chief Executive Officer of Customs, who made the order upon determining that no substitutable goods were produced in Australia, thereby meeting the core criteria specified in the Act. The primary objective of this instrument was to ensure that importers of these specific goods would benefit from the tariff concession, which was designed to provide economic advantages without disadvantaging any existing rights or imposing new liabilities on persons other than the Commonwealth. The instrument came into force on the date the application was lodged, 27 October 2005, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0514905 pertains to the Customs Act 1901, particularly under Part XVA, which governs the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Act applies to any person or entity that seeks to import goods eligible for tariff concessions, provided such goods are not specified in section 269SJ of the Act as ineligible for TCOs. This instrument is designed to reduce the rate of customs duty on certain imported goods, such as Ethylene Vinyl Acetate Copolymer/Terpolymer Aqueous Dispersions, if no substitutable goods are produced in Australia in the ordinary course of business. The TCOs operate within the national jurisdiction, as they are made under the authority of the Customs Act 1901, which is a Commonwealth Act. Once a TCO is registered, it comes into force on the date the application was lodged, without retroactively affecting any rights or imposing liabilities on persons other than the Commonwealth. The rights of importers are advantageously affected, allowing them to apply for duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation include section 269F, which allows a person to apply to the CEO for a Tariff Concession Order (TCO) in respect of goods, and section 269C, which provides the core criteria that a TCO application must meet (sections 269F and 269C). Under section 269P(3), if the CEO is satisfied that the application meets the core criteria, they must make a written order (the TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). Finally, a TCO is deemed to come into force on the day on which the application for the TCO was lodged (subsection 269S(1)).
The obligations and requirements imposed by the Customs Act 1901 on the parties or entities it governs include the obligation for a person to apply to the CEO for a TCO in respect of goods if they believe it meets the core criteria (section 269F). The CEO must then decide whether the application meets the core criteria, which requires them to be satisfied that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). Additionally, 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 (subsection 269S(4)).
Breach of the Customs Act 1901 may result in civil or criminal consequences. Under section 159, a person who contravenes a provision of the Customs Act 1901, or fails to comply with a direction given under the Act, is liable to a penalty of up to 10,000 penalty units (currently equivalent to AUD 1.7 million) for a corporation and up to 1,000 penalty units (currently equivalent to AUD 170,000) for an individual. In addition, under section 159A, a person who engages in customs fraud, which includes knowingly making a false statement or representation in relation to goods, is liable to a penalty of up to 20,000 penalty units for a corporation and up to 2,000 penalty units for an individual. Customs fraud also carries a maximum imprisonment term of 10 years for an individual and 20 years for a corporation. These penalties reflect the seriousness of breaches of the Customs Act 1901 and serve as a deterrent against non-compliance.