EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609656
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.
Geofabrics Australasia Pty Ltd applied for a TCO in respect of certain polyethylene mats on 01 June 2006.
Instrument
TCO No 0609656 was made on 18 August 2006. It declares that those certain polyethylene mats 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. 0609656 is taken to have come into force on 01 June 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 Australian Parliament, provides a framework for the regulation of customs and excise duties, including the imposition of tariff concession orders (TCOs) by the Chief Executive Officer of Customs. The Act was introduced to address the need for streamlined customs processes and to provide relief to certain industries by offering reduced duty rates on specific goods. The instrument in question, Tariff Concession Instrument No. 0609656, was made under section 269F of the Act, addressing an application by Geofabrics Australasia Pty Ltd for tariff concessions on certain polyethylene mats. The CEO of Customs determined that no substitutable goods were produced in Australia at the time of the application, thus satisfying the core criteria for a TCO, resulting in the application of a free rate of duty on these mats. This legislative measure aims to support the import industry by alleviating the financial burden associated with customs duties on specified goods, while ensuring that no existing rights or liabilities of third parties are adversely affected.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0609656, applies to any entity or individual seeking a tariff concession order (TCO) for specific goods imported into Australia. The Act provides a framework for the CEO of Customs to assess and grant TCOs, which lower the customs duty on specified goods to zero, provided that no substitutable goods are produced in Australia at the time the application is lodged. This instrument is particularly relevant to importers of goods who might benefit from reduced duty rates, as outlined in the explanatory statement. The geographic reach of this legislation is national, applying across all states and territories of Australia, as it is a Commonwealth Act. There are specific exclusions to the application of the TCO, such as those goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The application of the Act may also be extended or restricted through subordinate instruments, although no such instruments are mentioned in the explanatory statement for this specific TCO.
Key Provisions
The Customs Act 1901, specifically under Part XVA, outlines the procedure for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on certain goods. Section 269F of the Act enables a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application is not for goods specified in section 269SJ, which are ineligible for a TCO, the CEO must assess whether the application meets the core criteria. These criteria are detailed in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269B, respectively.
The obligations imposed by the Act on the CEO include ensuring that the application for a TCO is valid and meets the core criteria before proceeding. Section 269P(3) mandates that if the CEO is satisfied the application meets these criteria, a written order declaring the goods eligible for the concession must be issued. In the case of Geofabrics Australasia Pty Ltd's application for certain polyethylene mats, the CEO issued TCO No. 0609656 on 18 August 2006, declaring that these mats were subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions on the TCO application, although in this instance, no submissions were received.
Section 269S(1) of the Act specifies that a TCO comes into force on the day the application is lodged, making TCO No. 0609656 effective from 01 June 2006. This provision ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on any person. Importers of the goods in question can apply for a refund of duty under paragraph 126(1)(r) of the Regulations for goods imported since the TCO came into force, thus benefiting from the tariff concession.