EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608153
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.
Maccaferri applied for a TCO in respect of certain polypropylene geogrids on 10 May 2006.
Instrument
TCO No 0608153 was made on 28 July 2006. It declares that those certain polypropylene geogrids 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. 0608153 is taken to have come into force on 10 May 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, enacted by the Parliament of Australia, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to lower the customs duty on certain goods. This legislative instrument was designed to address the gap in the duty structure that may have prevented Australian businesses from effectively competing with foreign producers by providing them with a mechanism to apply for tariff reductions. The Tariff Concession Instrument No. 0608153, introduced on 28 July 2006, specifically provides a zero rate of duty on certain polypropylene geogrids, effective from the date of application on 10 May 2006, as the CEO was satisfied that no substitutable goods were produced in Australia. The policy objective is to ensure that Australian businesses are not disadvantaged by higher tariffs on goods for which suitable domestic alternatives do not exist, thereby fostering a more competitive and efficient market.
Scope and Application
The Customs Act 1901, as augmented by Tariff Concession Instrument No. 0608153, applies to the importation of certain polypropylene geogrids, which are subject to tariff concessions. This Act operates under the jurisdiction of the Commonwealth of Australia, specifically targeting the entities or individuals engaged in the importation of these goods. The primary objective of the Act in this context is to facilitate a reduction in customs duty for these specific goods, provided that no substitutable goods are produced in Australia. The concessions extend to any individual or entity importing the specified polypropylene geogrids, and the geographic reach is effectively national, as it applies to all imports into Australia. Exclusions under this Act include any goods that are specified in section 269SJ of the Customs Act, which details goods that cannot be subject to a tariff concession order. The application of this Act is further extended or restricted through subordinate instruments, which may provide additional criteria or conditions for the tariff concessions.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0608153 under the Customs Act 1901 (the Act) (sections 269C, 269P(3), 269K(1), and 269S(1)) establish the conditions and process for granting a Tariff Concession Order (TCO). Specifically, section 269C outlines that a TCO application meets the core criteria if, on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied the application meets these criteria, a written order declaring the goods subject to a lower rate of customs duty must be made. Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. Finally, section 269S(1) specifies that the TCO is considered to come into force on the date the application was lodged.
The obligations imposed by the Act on the parties involved primarily rest on the CEO of Customs. The CEO must ensure that the application for a TCO is valid and meets the core criteria set out in section 269C. This involves verifying that no substitutable goods are produced in Australia on the day the application is lodged. Additionally, the CEO is obligated to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to submit objections if they believe the TCO should not proceed. In the case of TCO No. 0608153, the CEO received no submissions in response to the published notice.
In terms of penalties and consequences, the Act does not explicitly outline specific offences or penalties for breaches related to the making of a TCO. However, any breaches of the Customs Act 1901 or associated regulations would be subject to the general penalties provided by those laws. These could include fines, imprisonment, or other civil or criminal penalties depending on the nature and severity of the breach. For instance, misleading or false statements made in an application could lead to fines under the relevant sections of the Customs Act.