EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612232
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.
Courtenay Polymers Pty Ltd applied for a TCO in respect of certain polybutylene terephthalate cyclic oligomers on 24 July 2006.
Instrument
TCO No 0612232 was made on 13 October 2006. It declares that those certain polybutylene terephthalate cyclic oligomers 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. 0612232 is taken to have come into force on 24 July 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 facilitate the regulation of imports and exports through customs duties and to provide for related matters. In addressing the economic and trade policy objectives of the Australian government, this legislation provides a framework for the application of tariff concessions to certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The Tariff Concession Instrument No. 0612232 was introduced on 13 October 2006, in response to an application by Courtenay Polymers Pty Ltd for a tariff concession on certain polybutylene terephthalate cyclic oligomers. The instrument was made to provide a zero rate of customs duty on these specific goods, reflecting the policy objective of promoting Australian industry by reducing the cost of importing necessary materials that are not produced domestically. The instrument became effective on 24 July 2006, the date of the application, without any submissions opposing the concession, thereby ensuring that importers could benefit from the reduced duty rate without incurring any additional liabilities.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs) established under Part XVA, applies to individuals and entities seeking lower rates of customs duty for specific goods imported into Australia. This Act facilitates applications for TCOs to be considered by the Chief Executive Officer of Customs (CEO), who must determine if the application aligns with the core criteria, specifically whether substitutable goods are produced in Australia. The application process and the scope of the concessions are clearly defined, ensuring that the CEO’s decision is made based on the absence of domestically produced alternatives that can serve the same purpose as the imported goods. This legislation extends its reach to all entities within the Commonwealth of Australia, promoting fair trade practices by providing tariff relief on eligible goods, thereby encouraging imports and potentially benefiting the domestic market through increased competition and availability of goods. Importantly, the Act excludes certain goods from eligibility for TCOs, as specified in section 269SJ, and ensures that the rights of importers are protected, allowing them to apply for refunds of duties paid on eligible goods since the TCO's effective date.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0612232 under the Customs Act 1901, include sections 269F, 269C, 269B, and 269P(3) (paragraphs 1-4). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) for certain goods. Section 269C outlines the core criteria that must be satisfied for the TCO to be granted, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Finally, section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, a written TCO must be issued.
The Act imposes several obligations on the parties involved. The CEO is required to make a decision on a TCO application as soon as practicable after accepting it as valid (subsection 269K(1)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). The applicant must ensure that their application meets the core criteria set out in section 269C. These criteria include demonstrating that no substitutable goods were produced in Australia on the day the application was lodged.
Failure to comply with the provisions of the Customs Act 1901, including the TCO process, may result in civil or criminal consequences. However, the specific offences, penalties, or consequences for breach are not detailed in the explanatory statement. Generally, under the Customs Act, breaches may attract penalties such as fines, imprisonment, or both, depending on the severity of the offence. The maximum penalties would be determined based on the specific provision breached and the nature of the offence. It is crucial for all parties to adhere to the requirements set out in the Act to avoid any legal repercussions.