EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0616376
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.
3M Australia Pty Ltd applied for a TCO in respect of certain vinyl sheeting on 31 August 2006.
Instrument
TCO No 0616376 was made on 17 November 2006. It declares that those certain vinyl sheeting 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. 0616376 is taken to have come into force on 31 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. 0616376 was enacted in 2006 under the Customs Act 1901, aiming to provide relief to specific imported goods by reducing their customs duty rates. The instrument addresses the need for the Australian government to facilitate the import of goods that are not produced domestically, thus supporting trade and economic activities. The Australian Parliament authorised the creation of Tariff Concession Orders (TCOs) to allow the Chief Executive Officer of Customs to grant tariff concessions on certain goods, provided they meet the criteria outlined in the Act. The policy objective behind this instrument is to ensure that the importation of such goods is not hindered by prohibitive duty rates, thereby benefiting importers and potentially lowering the cost of goods for consumers.
The Tariff Concession Instrument No. 0616376 specifically concerns a TCO application submitted by 3M Australia Pty Ltd for certain vinyl sheeting. The instrument was made on 17 November 2006, declaring that these goods are subject to a zero percent duty rate, down from the general rate of 5 percent. The instrument came into effect on 31 August 2006, the date the application was lodged, and it does not affect any pre-existing rights or impose any new liabilities on persons other than the Commonwealth. Importers of these goods can apply for a refund of duty paid on imports since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0616376, facilitates the reduction of customs duties on specific goods when no substitutable goods are produced in Australia. This instrument, which applies to the goods specified in the instrument, such as certain vinyl sheeting, is applicable from the date the application was lodged, in this case, 31 August 2006. The Act empowers the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) if the core criteria are met, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was made. The TCO affects the rate of duty, reducing it from a general rate of 5% to 0% for the specified goods. The application of this instrument is national in scope and extends to all entities and persons involved in the importation of the specified goods, provided they comply with the Act’s requirements. Any entity or person importing the specified goods after the commencement date can benefit from the reduced duty rate, while existing rights and liabilities of parties are preserved unless otherwise specified.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0616376 under the Customs Act 1901 (section 269F) require the Chief Executive Officer (CEO) of Customs to consider applications for Tariff Concession Orders (TCOs). If the CEO is satisfied that the application meets the core criteria, which is determined by the absence of substitutable goods produced in Australia (section 269C), the CEO must make a TCO that lowers the customs duty rate on the specified goods (section 269P(3)). In this case, the TCO No. 0616376 applies to certain vinyl sheeting, reducing the duty rate from 5% to 0% (section 269S(1)).
The Act imposes several obligations on the parties involved. Firstly, the CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. Once the CEO accepts a TCO application as valid, they must publish a notice in the Gazette, inviting any interested parties to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)). In this instance, no submissions were received in response to the notice.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly outline specific criminal or civil penalties for non-compliance with the TCO provisions. However, failure to comply with the requirements of the TCO or the Act generally may result in the imposition of additional duties, fines, or other enforcement actions by Customs. The CEO has the authority to enforce the provisions of the TCO and can take appropriate measures to ensure compliance. It is important for applicants and affected parties to adhere to the conditions and requirements set out in the TCO to avoid any potential penalties or consequences.