EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617091
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.
DIC International Australia Pty Ltd applied for a TCO in respect of certain pearlescent pigments on 12 September 2006.
Instrument
TCO No 0617091 was made on 01 December 2006. It declares that those certain pearlescent pigments 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 %. The rate of duty for the goods subject to the TCO is free.
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. 0617091 is taken to have come into force on 12 September 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, as amended, facilitates the reduction of customs duty on certain imported goods through Tariff Concession Orders (TCOs), a mechanism designed to stimulate trade and economic activity. Enacted by the Parliament of Australia, this legislation addresses the gap in tariff structures that may hinder the competitiveness of Australian industries by allowing for the reduction of customs duties on specific goods where no substitutable domestic production exists. The core objective is to ensure that Australian businesses can access imported goods at a reduced cost, thereby encouraging the importation of products that are not manufactured locally, and supporting broader economic policies aimed at fostering trade and industry growth. The Tariff Concession Instrument No. 0617091, issued on 1 December 2006, exemplifies this legislative intent by providing tariff relief on certain pearlescent pigments, ensuring these goods are subject to a lower duty rate as no equivalent goods were produced in Australia at the time of application.
Scope and Application
The Tariff Concession Instrument No. 0617091, made under the Customs Act 1901, pertains specifically to the concession of customs duty rates for certain pearlescent pigments. This instrument applies to the goods specified in the application submitted by DIC International Australia Pty Ltd, and it targets the reduction of customs duty for these goods to zero. The instrument operates within the Commonwealth of Australia, extending its reach to any entity importing the specified goods into the country. The application of the instrument is subject to the criteria set forth in section 269C of the Customs Act, which requires that no substitutable goods are produced in Australia in the ordinary course of business. Exclusions to the application of the TCO include goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons in relation to actions taken prior to the instrument's effective date. Instead, it provides a benefit to importers by potentially allowing them to apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force.
Key Provisions
The primary sections relevant to the Tariff Concession Instrument No. 0617091 under the Customs Act 1901 (section 269F) involve the process by which a Tariff Concession Order (TCO) may be applied for and granted. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application pertains to goods not listed in section 269SJ, which includes goods that cannot be subject to a TCO, the CEO must then assess whether the application meets the core criteria as stipulated in section 269C. This assessment hinges on the absence of substitutable goods produced in Australia in the ordinary course of business on the date the application was lodged.
The obligations imposed on the parties by the Act include the requirement for applicants to ensure their goods meet the core criteria for a TCO. The CEO has the responsibility to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). Additionally, the CEO must determine whether the application meets the core criteria, specifically ensuring that no substitutable goods were produced in Australia at the time of application (section 269C).
Any breach of the provisions of the Customs Act 1901 may lead to various civil or criminal consequences. The specific offences, penalties, or consequences for breach of the TCO provisions are not detailed in the explanatory statement. However, under the general framework of the Customs Act, breaches can result in penalties that may include fines and, in severe cases, imprisonment. The maximum penalties for contraventions of customs laws can vary significantly depending on the nature and severity of the breach. For example, knowingly making a false statement in an application for a TCO could lead to penalties under section 272 of the Customs Act 1901, which includes fines and imprisonment terms as prescribed by the Act.