EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605047
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.
Mr Dale Barnes applied for a TCO in respect of certain ultra violet clarifiers on 13 March 2006.
Instrument
TCO No 0605047 was made on 26 May 2006. It declares that those certain ultra violet clarifiers 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. 0605047 is taken to have come into force on 13 March 2006.
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 enacted to provide for the regulation of the importation and exportation of goods, including the imposition and remission of duties. The Act was introduced to address the need for a systematic approach to the management of customs duties and the regulation of trade. The problem it was designed to address included the need to ensure that the importation of goods was properly controlled and taxed, while also facilitating legitimate trade by providing for tariff concessions where appropriate. The explanatory statement for Tariff Concession Instrument No. 0605047, made by the Chief Executive Officer of Customs under section 269F of the Act, illustrates the application of this framework. In this case, the instrument was introduced to provide a tariff concession for certain ultra violet clarifiers, reducing the customs duty on these goods from 5% to free, reflecting the policy objective of supporting specific industries by reducing the cost of importing certain goods.
Scope and Application
The Tariff Concession Instrument No. 0605047 under the Customs Act 1901 applies to goods specified in the instrument, namely certain ultra violet clarifiers, which are now subject to a lower rate of customs duty as per the order made by the Chief Executive Officer of Customs (the CEO). This concession is applicable to the goods identified in the instrument, which in this case are the ultra violet clarifiers. The instrument extends across the Commonwealth of Australia, affecting all entities importing these goods within its jurisdiction. The application of the Tariff Concession Order (TCO) does not extend to goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The CEO must determine that no substitutable goods were produced in Australia on the date the application was lodged to meet the core criteria for a TCO, as outlined in sections 269C, 269D, 269E and 269F of the Act. The instrument came into force on the date the application for the TCO was lodged, 13 March 2006, and does not affect any existing rights or impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0605047 are primarily outlined in sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C specifies the core criteria that must be met for a Tariff Concession Order (TCO) to be made. If the Chief Executive Officer (CEO) of Customs is satisfied that an application for a TCO meets these criteria, which include the absence of substitutable goods produced in Australia at the time of application, the CEO is required to issue a TCO under section 269P. This order effectively declares that the specified goods are subject to a concessional rate of customs duty as outlined in the Customs Tariff Act 1995. Section 269S sets out the effective date of the TCO, which is taken to be the date on which the application was lodged.
The Act imposes several obligations on the parties involved in the TCO process. The CEO is obligated to review any TCO application to determine if it meets the core criteria set out in section 269C. This includes verifying that no substitutable goods were produced in Australia and that the application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. If the CEO is satisfied that the application meets the criteria, they must make a written order (TCO) and publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K. Importers who benefit from the TCO may apply for a refund of duty on goods imported since the effective date of the TCO, as outlined in paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can result in various consequences. If a person knowingly provides false or misleading information in a TCO application, they may be subject to penalties under the Act. While the specific penalties are not detailed in the explanatory statement, such offences typically carry civil or criminal penalties depending on the severity of the breach. Additionally, any person who imports goods without the appropriate concessions or who fails to comply with the refund process may face additional penalties or liabilities. However, it is important to note that the TCO itself does not impose any liabilities on any person other than the Commonwealth.