EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617969
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.
Staedtler Pacific Pty Ltd applied for a TCO in respect of certain clay modelling polymers on 26 October 2006.
Instrument
TCO No 0617969 was made on 5 January 2007. It declares that those certain clay modelling polymers 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. 0617969 is taken to have come into force on 26 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, enacted by the Parliament of Australia, provides a framework for the administration of customs duties, including the ability to issue Tariff Concession Orders (TCOs) which reduce the duty on certain goods. The Act was introduced to address the need for a flexible mechanism to adjust customs duties on specific goods, thereby supporting economic and trade policies. TCOs are created under section 269F of the Act, which allows for applications to the Chief Executive Officer of Customs to reduce the duty on goods where no substitutable goods are produced in Australia. This approach aims to support Australian industries by providing tariff relief for goods that are not locally produced, facilitating trade and economic growth. Instrument TCO No. 0617969, made on 5 January 2007, is an example of such a concession, applying to certain clay modelling polymers and reducing their duty from 5% to 0%. This legislative mechanism ensures that Australian industries can remain competitive while providing opportunities for economic efficiency in trade.
Scope and Application
The Tariff Concession Instrument No. 0617969 applies to the importation of certain clay modelling polymers, specifically those identified in the instrument, and is enacted under the Customs Act 1901. The Act permits the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce the customs duty on specific goods if certain criteria are met. This includes the condition that no substitutable goods are produced in Australia at the time the application is made. The instrument pertains to the importation of these goods, affecting importers who may benefit from a reduced duty rate of 0%, as opposed to the general rate of 5%. The instrument applies across Australia and is effective from the date the application was lodged, which is 26 October 2006. Importantly, the TCO does not adversely affect the rights of any person or impose new liabilities on anyone, and it allows for the possibility of duty refunds for importers of these goods since the commencement date of the TCO.
Key Provisions
The primary operative sections of this legislation, specifically Tariff Concession Instrument No. 0617969, revolve around the Customs Act 1901 (sections 269F, 269C, 269B, and 269P(3)) and the Customs Tariff Act 1995 (Schedule 4, item 50). Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for Tariff Concession Orders (TCOs) in respect of goods, provided they do not fall under the prohibitions listed in section 269SJ. If the CEO determines that the application meets the core criteria outlined in section 269C and 269B, such as the absence of substitutable goods produced in Australia, they must issue a written TCO (section 269P(3)). This particular TCO, No. 0617969, pertains to certain clay modelling polymers, reducing their customs duty rate from 5% to 0% based on item 50 of Schedule 4 to the Tariff.
The obligations and requirements imposed by the Act primarily focus on the process and conditions for applying for and issuing a TCO. The CEO must ensure that applications are assessed against the core criteria, which involves verifying that no substitutable goods are produced in Australia at the time of application. This assessment is crucial as it determines the eligibility of goods for reduced duty rates. The CEO must also publish a notice in the Gazette inviting public submissions if there are concerns about the TCO, although in this case, no submissions were received. The Act further stipulates that TCOs should not disadvantage any person other than the Commonwealth and should not impose liabilities on any person.
In terms of consequences for breach, the Customs Act 1901 does not explicitly detail specific offences, penalties, or consequences for non-compliance with TCO provisions. However, the general framework of the Customs Act implies that non-compliance with customs regulations could result in civil or criminal penalties, including fines and imprisonment. The severity of penalties would depend on the nature and extent of the breach, as outlined in other sections of the Customs Act and related regulations. Given the specific nature of TCOs, any failure to adhere to the prescribed process or misrepresentation of facts in an application could lead to revocation of the TCO and potential legal action against the applicant.