EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515414
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.
Ultimatestud Building Systems Pty Ltd applied for a TCO in respect of a certain rigid PVC profile extrusion plant on 04 November 2005.
Instrument
TCO No 0515414 was made on 23 January 2006. It declares that those certain rigid PVC profile extrusion plants 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. 0515414 is taken to have come into force on 04 November 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, enacted by the Parliament of Australia, establishes a framework for the regulation of customs and excise duties. This Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, which allow for reduced customs duty rates on specified goods. This legislative instrument aims to address the problem of high customs duties on certain imported goods that do not have Australian-made alternatives, thereby encouraging their importation and potentially fostering industry development. The Tariff Concession Instrument No. 0515414, issued under the authority of the Act, was introduced in response to an application by Ultimatestud Building Systems Pty Ltd for a tariff concession on a rigid PVC profile extrusion plant. The instrument, which came into force on the date the application was lodged, provides for a zero rate of duty on these specific goods, as no substitutable goods were produced in Australia, meeting the core criteria set out in section 269C of the Act. The policy objective is to facilitate the importation of goods that are not domestically produced, potentially benefiting importers by allowing them to claim duty refunds for imports made since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0515414 under the Customs Act 1901 applies to specific goods that are the subject of a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. In this particular case, the Act applies to certain rigid PVC profile extrusion plants that were the subject of an application by Ultimatestud Building Systems Pty Ltd. The legislation facilitates the application process for tariff concessions, ensuring that the goods in question are eligible for reduced customs duties if no substitutable goods are produced in Australia. The application process involves meeting core criteria such as the absence of substitutable goods produced domestically and being free from exclusions under section 269SJ of the Act. The geographic reach of this legislation is national, as it operates within the framework of Australian customs law and the Customs Act 1901. The TCO, once granted, provides immediate benefit to the rights of importers who can apply for duty refunds on goods imported since the effective date of the TCO, without imposing any new liabilities on persons other than the Commonwealth.
Key Provisions
The key operative sections of the Tariff Concession Order No. 0515414 under the Customs Act 1901 (section 269F) allow for the application by a person to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning goods, with a lower rate of customs duty applying to goods that are the subject of a TCO. Specifically, section 269C sets out the core criteria that must be met for an application to be considered, namely that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets these core criteria, a written order must be made declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes certain obligations on parties applying for a TCO. For instance, applicants must ensure that their applications meet the core criteria outlined in section 269C. This involves demonstrating that no substitutable goods were produced in Australia in the ordinary course of business on the date the application is lodged. Additionally, the CEO is required to publish a notice in the Gazette (section 269K(1)) inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, no submissions were received by the CEO.
The Act also delineates specific offences, penalties, or consequences for breaches. Although the Explanatory Statement does not detail specific penalties, it is understood that non-compliance with the conditions set out in a TCO could lead to civil or criminal consequences, depending on the nature and severity of the breach. Generally, breaches of customs regulations can result in financial penalties or prosecution, and in severe cases, imprisonment.
The Tariff Concession Order No. 0515414, which came into force on 4 November 2005, benefits importers by providing a refund of duty on goods imported since the TCO's effective date. Importantly, the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no pre-existing rights or liabilities are adversely impacted. This legislative instrument thus aims to support specific industries by reducing the financial burden of customs duties on certain imported goods, thereby potentially stimulating trade and economic activity.