EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613059
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.
Techpack Pty Ltd applied for a TCO in respect of certain polystyrene foam on 4 August 2006.
Instrument
TCO No 0613059 was made on 20 October 2006. It declares that those certain polystyrene foam 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 0%.
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. 0613059 is taken to have come into force on 4 August 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, established a framework for the administration of customs and excise duties, including provisions for tariff concession orders (TCOs). The Act was intended to address the need for tariff concessions to support industries and economic activities by reducing the duty on specific goods under certain conditions. The Tariff Concession Instrument No. 0613059, introduced under this Act, aims to provide a lower rate of customs duty on particular goods where no substitutable goods are produced in Australia, thereby fostering economic efficiency and competitiveness. The policy objective of this instrument is to encourage the importation of specific goods by alleviating the financial burden on businesses and consumers, thus supporting broader economic goals.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia, as well as those involved in the production and supply of goods within Australia. The Act facilitates the application of tariff concession orders (TCOs) by the Chief Executive Officer of Customs, which may reduce the customs duty on specific goods. The application process under the Act ensures that no substitutable goods are produced in Australia before a TCO is granted. This legislative framework is instrumental in managing the importation of goods while ensuring fair production practices within Australia. The scope of the Act extends to all states and territories of Australia, thereby providing a uniform national standard for customs duty concessions.
Subordinate instruments, such as Tariff Concession Orders, further refine the application of the Customs Act 1901 by specifying particular goods eligible for reduced duty rates. For instance, TCO No. 0613059, concerning certain polystyrene foam, illustrates how the Act can be applied to benefit specific industries by reducing their import costs. This particular order came into effect on the date of the application, 4 August 2006, and no submissions were received against its implementation, indicating broad acceptance of its terms. The Act ensures that the rights of importers are protected and that no existing liabilities are imposed retroactively, thereby providing clarity and certainty in the customs duty regime.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269C, 269F, 269P(3)). An application for a TCO can be made by a person under section 269F if the goods in question are not specified in section 269SJ. If the CEO determines that the application meets the core criteria set out in section 269C, a TCO will be issued, declaring the goods to which a prescribed item in Schedule 4 to the Customs Tariff Act 1995 applies. For Techpack Pty Ltd’s application regarding certain polystyrene foam, the CEO issued TCO No 0613059 on 20 October 2006, declaring that the goods are subject to item 50 of Schedule 4 to the Tariff, with a reduced duty rate from 5% to 0%.
The Act imposes specific obligations on the CEO when considering an application for a TCO. Firstly, the CEO must ensure that the goods are not specified in section 269SJ and that the application meets the core criteria outlined in section 269C. The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made (subsection 269K(1)). In the case of Techpack Pty Ltd's application, the CEO did not receive any submissions in response to the Gazette notice.
Upon issuance of a TCO, the CEO is required to ensure that the rights of any person other than the Commonwealth are not adversely affected or that no new liabilities are imposed for actions taken before the TCO's effective date (subsection 269S(1)). This means that the TCO does not disadvantage existing rights or impose new liabilities on individuals or entities. For Techpack Pty Ltd's application, the TCO did not disadvantage any existing rights and imposed no new liabilities. Importers can benefit by applying for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
There are no explicit provisions in the Act regarding offences, penalties, or consequences for breach related to the issuance or application of TCOs. However, failure to comply with the requirements of the Customs Act 1901 or associated regulations may result in general penalties under other sections of the Act, which could include fines or imprisonment. The specific penalties would depend on the nature and severity of the breach, as outlined in other relevant sections of the Act.