EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616281
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.
Alcoa World Alumina applied for a TCO in respect of certain geomembranes on 30 August 2006.
Instrument
TCO No 0616281 was made on 24 November 2006. It declares that those certain geomembranes 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. 0616281 is taken to have come into force on 30 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 was enacted by the Parliament of Australia to manage the regulation of customs and excise, including the collection of duty and taxes on imported and exported goods. The Act was introduced to address the need for a comprehensive legislative framework governing the administration of customs duties and tariffs, ensuring that the government could effectively regulate and monitor trade activities. One of the mechanisms established under the Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to certain goods, provided specific criteria are met. The explanatory statement for Tariff Concession Instrument No. 0616281, made under the Customs Act, outlines the process and criteria for such concessions. In this particular case, the instrument was made to provide a zero per cent duty rate on certain geomembranes, reducing the general rate of duty from five per cent, following an application by Alcoa World Alumina and the CEO's determination that no substitutable goods were produced in Australia. The instrument aims to facilitate trade by reducing the cost of importing these goods, thereby encouraging their use and availability in the Australian market.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation and exportation of goods in Australia, including the application and implementation of Tariff Concession Orders (TCOs). Specifically, Part XVA of the Act governs the process by which a person may apply to the Chief Executive Officer (CEO) of Customs for a TCO, which reduces the customs duty on specified goods. The legislation mandates that the CEO must assess whether the application meets the core criteria, particularly whether no substitutable goods are produced in Australia. If the application is approved, a TCO is issued, providing tariff concessions on the specified goods. The instrument in question, TCO No 0616281, applies to certain geomembranes, reducing their duty rate from 5% to 0%. The Act extends across the Commonwealth of Australia and does not specify exclusions beyond those goods listed in section 269SJ, which are ineligible for TCOs. Additionally, the CEO is required to consult by publishing notices in the Gazette, although no submissions were received in response to this particular TCO application.
Key Provisions
The Tariff Concession Instrument No. 0616281, under the Customs Act 1901 (the Act), establishes specific conditions under which a Tariff Concession Order (TCO) can be issued by the Chief Executive Officer of Customs (the CEO) (s 269F). This particular TCO, No. 0616281, pertains to certain geomembranes, which are subject to a lower customs duty rate of 0% rather than the general rate of 5% (s 269P(3)). This reduction is effective from the date the TCO application was lodged, 30 August 2006 (s 269S(1)), and it does not retroactively affect any rights or impose liabilities prior to this date (s 269S(1)).
The Act imposes certain obligations on applicants seeking a TCO. An applicant must ensure that their application complies with the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). Additionally, the CEO has a duty to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO application (s 269K(1)). This notice must be published as soon as practicable after accepting the application as valid. The CEO did not receive any submissions in response to the notice for TCO No. 0616281.
In terms of compliance, the CEO must thoroughly assess the application to determine if the core criteria are met, specifically whether substitutable goods were produced in Australia on the application date (s 269C). The CEO's decision to make a TCO is mandatory if these criteria are satisfied (s 269P(3)). Failure to comply with the requirements of the Act or any TCO could result in legal consequences. Although the explanatory statement does not explicitly list offences or penalties, breaches of customs legislation generally can lead to both civil and criminal penalties. Civil penalties might include fines, while criminal penalties could involve imprisonment, reflecting the severity of non-compliance with customs regulations.
The TCO benefits importers by reducing the customs duty on the specified geomembranes from 5% to 0%, effective from 30 August 2006 (s 269S(1)). Importers can also apply for a refund of duty paid on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth (s 269S(1)).