EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613415
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.
Techni-Chem Australia Pty Ltd applied for a TCO in respect of certain polypropylene on 14 August 2006.
Instrument
TCO No 0613415 was made on 10 November 2006. It declares that those certain polypropylene 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. 0613415 is taken to have come into force on 14 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 Commonwealth Parliament, establishes the framework for the regulation of customs and excise in Australia. The Act was introduced to address the need for a structured approach to managing the import and export of goods, ensuring compliance with Australian laws, and protecting domestic industries. The Tariff Concession Instrument No. 0613415, made under the Customs Act 1901, aims to provide tariff concessions to certain goods by reducing the customs duty rate, thereby facilitating trade and economic activity. This particular instrument, effective from 14 August 2006, pertains to certain polypropylene products, setting their duty rate to zero percent, provided no substitutable goods are produced in Australia. This initiative aligns with the policy objective of enhancing the competitiveness of Australian industries by reducing import costs.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs. These orders apply to goods for which an application has been made and approved, thereby granting them a lower rate of customs duty compared to the standard rate. The application process is initiated by a person or entity seeking a tariff concession, provided the goods in question do not fall under the restricted list specified in section 269SJ of the Act. An application is considered valid if, on the date it was lodged, there were no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. If the CEO determines that the application meets these criteria, a TCO is issued, specifying the reduced duty rate applicable to the goods in question. The scope of this legislation is national, impacting importers of the specified goods across Australia, and it does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0613415 include sections 269C, 269P, and 269S, which together outline the criteria for granting a Tariff Concession Order (TCO) and the process for its implementation. Section 269C specifies that a TCO application meets the core criteria if, at the time of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written order, the TCO, specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S sets the commencement date of the TCO as the date the application was lodged.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application and approval process for a TCO. The applicant, in this case Techni-Chem Australia Pty Ltd, must submit a valid application to the CEO, demonstrating that no substitutable goods are produced in Australia. The CEO is required to assess the application against the core criteria, publish a notice in the Gazette inviting submissions, and make a decision on the application. If the application meets the criteria and no objections are received, the CEO must issue the TCO. Importers of the goods subject to the TCO are entitled to apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breaches of the TCO provisions within the explanatory statement. However, the Act and associated regulations likely provide for general compliance and enforcement mechanisms. For example, failure to comply with customs regulations can result in civil penalties such as fines and criminal penalties including imprisonment, depending on the nature and severity of the breach. The exact penalties would be detailed in the broader Customs Act 1901 and related regulations.