EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608335
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.
Termguard Pty Ltd applied for a TCO in respect of certain drilled, unplasticised PVC tubing on 15 May 2006.
Instrument
TCO No 0608335 was made on 28 July 2006. It declares that those certain drilled, unplasticised PVC tubing are goodsis a product 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 10%. 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. 0608335 is taken to have come into force on 15 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 was enacted to regulate the importation and exportation of goods in Australia and includes provisions for the application of customs duty. To address specific economic or industry needs, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can provide relief from customs duty on specified goods, provided certain criteria are met. Instrument 0608335, made in 2006, is an example of such a concession applied to certain drilled, unplasticised PVC tubing, reducing the duty from 10% to free. The policy objective is to support industries by reducing the cost of imported goods, thus facilitating their competitiveness and efficiency. The process involves an application by interested parties, scrutiny by the CEO, and potential public consultation, ensuring that the concessions are granted appropriately and without undue disadvantage to other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 0608335 applies to the specific goods, in this case certain drilled, unplasticised PVC tubing, that are subject to a Tariff Concession Order (TCO) made under section 269C of the Customs Act 1901. This Act applies to the Commonwealth of Australia and pertains to the process by which an application can be made to the Chief Executive Officer of Customs (CEO) for a TCO, which, if granted, results in a lower rate of customs duty for the specified goods. The application process is available to any person who meets the criteria outlined in the Act, provided the goods in question are not specified in section 269SJ of the Customs Act 1901, which lists those goods that cannot be subject to a TCO. The application must demonstrate that no substitutable goods were produced in Australia on the day the application was lodged, as defined by sections 269D, 269E, and 269F of the Act. The TCO in question, which became effective on 15 May 2006, pertains only to the particular goods specified and does not affect the rights of any person, except to the benefit of importers who may apply for a refund of duty paid on these goods since the effective date of the TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0608335 are sections 269C, 269P(3), and 269S, which together establish the framework for the creation of a Tariff Concession Order (TCO). Section 269C sets the core criteria that must be satisfied for a TCO application to be accepted. Specifically, it requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If this condition is met, section 269P(3) mandates that the Chief Executive Officer of Customs (CEO) must make a written TCO. Finally, section 269S provides that a TCO is to be taken as having come into force on the day the application for the TCO was lodged.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for the CEO to ensure that any application for a TCO meets the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO, as stipulated in subsection 269K(1). Additionally, the Act requires that the TCO should not affect the rights of any person other than the Commonwealth, ensuring that no individual or entity is disadvantaged or incurs liabilities for actions taken before the TCO comes into effect. This is clarified under subsection 269S(1) and paragraph 126(1)(r) of the Regulations, which also allows for the refund of duty on goods imported since the effective date of the TCO.
Under the Customs Act 1901, breaches of the provisions regarding TCOs can result in civil and criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, it is implied that non-compliance with the Act's requirements could lead to legal action. The potential penalties could include fines or other sanctions as prescribed under the Customs Act, depending on the nature and severity of the breach. The maximum penalties for such breaches are not explicitly stated in the explanatory statement but would typically be aligned with those outlined in the Act itself.