EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615825
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.
Swift & Co Ltd applied for a TCO in respect of certain polyvinyl chloride resins on 13 October 2006.
Instrument
TCO No 0615825 was made on 22 December 2006. It declares that those certain polyvinyl chloride resins 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. 0615825 is taken to have come into force on 13 October 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 regulate and administer the customs and excise system in Australia. One of its key features is the ability for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which lower the rate of customs duty on specified goods. The Customs Act 1901 provides that a TCO application is considered valid if no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied with the application, they must make a written order declaring the goods to which the concession applies. This mechanism allows for the alleviation of customs duties on certain goods, thereby encouraging trade and economic efficiency. The Tariff Concession Instrument No. 0615825, made under this Act, exemplifies the application of this scheme, providing a 0% duty rate on certain polyvinyl chloride resins, thereby benefiting importers by reducing their duty liabilities.
Scope and Application
The Customs Act 1901, through its Tariff Concession Instrument No. 0615825, applies to any entity or individual seeking to import specific goods into Australia for which a Tariff Concession Order (TCO) is applicable, effectively reducing the customs duty from the general rate to zero percent for those goods. This Act facilitates the application process whereby an applicant can request a TCO if the goods in question are not substitutable by Australian-produced goods and meet other specified criteria under the Act. The TCO scheme is administered at the Commonwealth level and applies nationally across Australia, ensuring uniformity in the application of tariff concessions. Any goods specified in section 269SJ of the Customs Act 1901 are excluded from TCO applications, and no submissions opposing the TCO were received during the consultation period following the publication of the TCO application in the Gazette. The TCO comes into effect on the date the application is lodged, and it does not retroactively affect any transactions or impose liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation, specifically sections 269C, 269B, and 269P(3) of the Customs Act 1901, establish the framework for the creation of Tariff Concession Orders (TCOs). These sections detail the criteria an application must meet for the Chief Executive Officer of Customs (CEO) to consider it valid, including the absence of substitutable goods produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these core criteria, they must then issue a written order, a TCO, declaring that the specified goods are subject to a reduced rate of customs duty. In the case of Swift & Co Ltd’s application for certain polyvinyl chloride resins, the CEO concluded that no substitutable goods were produced in Australia, thus satisfying the core criteria, and a TCO was issued on 22 December 2006.
The Act imposes certain obligations and requirements on both applicants and the CEO. Applicants must ensure their submissions are valid under the core criteria outlined in sections 269C and 269B, and they must provide sufficient evidence that no substitutable goods are produced in Australia. The CEO, on the other hand, is obligated to review each application carefully, determine whether it meets the core criteria, and make a decision within the specified timeframe. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In the case of TCO No. 0615825, the CEO received no such submissions, facilitating the swift issuance of the TCO.
The Customs Act 1901 does not explicitly state offences, penalties, or civil/criminal consequences for breaches related to the issuance or application of TCOs. However, general provisions of the Act and related regulations may impose penalties for non-compliance with customs duties and other related obligations. While the specific penalties for breaches concerning TCOs are not detailed in the provided text, it is implied that any failure to comply with the requirements and obligations set out in the Act could result in enforcement actions, including financial penalties or other sanctions as prescribed by the relevant legislation. The rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the day on which the TCO is taken to have come into force.