EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613888
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.
RLA Polymers Pty Ltd applied for a TCO in respect of certain vinyl acetate ethylene emulsions on 18 August 2006.
Instrument
TCO No 0613888 was made on 3 November 2006. It declares that those certain vinyl acetate ethylene emulsions 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. 0613888 is taken to have come into force on 18 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 Tariff Concession Instrument No. 0613888, enacted in 2006, operates under the Customs Act 1901 and addresses the need for tariff concessions on specific imported goods to foster economic efficiency and competitive balance within the Australian market. This legislation was introduced by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Act, subject to certain core criteria being met. The primary policy objective of this instrument is to ensure that customs duty rates are appropriately reduced for certain imported goods, such as vinyl acetate ethylene emulsions, where no substitutable goods are produced domestically, thereby enhancing the competitiveness of Australian businesses and facilitating the import of necessary goods.
The instrument came into effect on 18 August 2006, the date on which the application for the tariff concession was lodged. The application by RLA Polymers Pty Ltd was accepted, and a TCO was issued on 3 November 2006, declaring that the specified vinyl acetate ethylene emulsions are subject to a zero rate of duty instead of the general rate of 5%. This measure aims to benefit importers by potentially allowing them to claim refunds of duty on goods imported since the TCO took effect, without imposing any new liabilities on any parties other than the Commonwealth.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs) as outlined in Part XVA, provides a mechanism for the Chief Executive Officer of Customs to grant concessions on customs duty for certain imported goods, provided they meet specific criteria. Specifically, a TCO can be applied for by any person regarding goods that are not listed in section 269SJ of the Act, which details goods ineligible for tariff concessions. The CEO must determine whether the application meets the core criteria, which include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the date of application. If these conditions are satisfied, a TCO can be issued, as demonstrated by TCO No. 0613888 for vinyl acetate ethylene emulsions, reducing the duty rate from 5% to 0%. This legislative framework applies across Australia and allows the CEO to further refine or extend its application through subordinate instruments, ensuring that the concessions do not disadvantage existing rights or impose new liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The Customs Act 1901, particularly Part XVA, outlines a scheme whereby Tariff Concession Orders (TCO) can be issued by the Chief Executive Officer of Customs (CEO) to provide tariff relief on specific goods. Section 269F of the Act allows for an application to be made to the CEO for a TCO concerning particular goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO, they must then assess whether the application fulfils the core criteria specified in section 269C. This section stipulates that the application meets the core criteria if, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business.
Section 269B of the Act defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Specifically, "substitutable goods" are goods manufactured in Australia that can be used in a manner equivalent to the goods in question. If the CEO is satisfied that the application satisfies the core criteria, they must, under section 269P(3), issue a written TCO order declaring that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995. In this case, TCO No. 0613888, issued on 3 November 2006, declares that certain vinyl acetate ethylene emulsions are subject to item 50 of Schedule 4, with the duty rate reduced from 5% to 0%.
The obligations imposed by the Act on the CEO include publishing a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice invites any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. In this instance, the CEO did not receive any submissions in response to the published notice. The TCO itself comes into force on the date the application was lodged, as stipulated in section 269S(1) of the Act. Consequently, TCO No. 0613888 is considered to have come into effect on 18 August 2006, the date of the application. Importantly, the TCO does not adversely affect the rights of any person, other than the Commonwealth, nor does it impose any liabilities for actions taken before the date of registration.
The Act also outlines potential consequences for breaches of its provisions. Although specific penalties are not detailed in the explanatory statement, breaches of the Customs Act 1901 can lead to both civil and criminal penalties. Civil penalties can include fines, while criminal penalties can involve imprisonment, depending on the severity and nature of the breach. These penalties are intended to ensure compliance with the Act and the proper administration of customs duties and tariffs.