EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619539
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.
Gardiner Australia Pty Ltd applied for a TCO in respect of certain expanded closed cell synthetic rubber slabs on 11 December 2006.
Instrument
TCO No 0619539 was made on 09 March 2007. It declares that those certain expanded closed cell synthetic rubber slabs 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 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. 0619539 is taken to have come into force on 11 December 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 Commonwealth Parliament, established a framework within which the Chief Executive Officer of Customs could make Tariff Concession Orders (TCOs) to apply lower rates of customs duty on specified goods. This was introduced to address the need for tariff concessions for goods that could not be domestically produced or for which there were no suitable substitutes available in Australia. TCO No. 0619539, made under the authority of this Act, was introduced in response to an application from Gardiner Australia Pty Ltd for certain expanded closed cell synthetic rubber slabs, effective from 11 December 2006. The instrument was published in the Gazette to invite submissions, none of which were received. As a result, the CEO was satisfied that the application met the core criteria and subsequently made the order, which came into force on the date of application. The policy objective of this legislation is to provide tariff relief for specific goods, thereby supporting import activities and potentially enhancing economic efficiency by reducing costs for importers.
Scope and Application
The Customs Act 1901, as detailed in the Explanatory Statement for Tariff Concession Instrument No. 0619539, pertains to the application and granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for certain goods. This legislation applies to individuals and entities seeking lower rates of customs duty for specified goods through the submission of a TCO application. The Act’s provisions ensure that a TCO is only granted if no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. Notably, the Act excludes certain goods from TCO consideration, as outlined in section 269SJ. The geographic scope of this legislation is national, as it pertains to the importation of goods into Australia and the subsequent application of the Customs Act throughout the Commonwealth. The TCO process is further governed by subordinate instruments such as the Customs Regulations 1995, which provide additional details on the application and effects of TCOs.
Key Provisions
The Tariff Concession Instrument No. 0619539 under the Customs Act 1901 outlines the conditions under which the Chief Executive Officer of Customs (CEO) may grant a Tariff Concession Order (TCO). A TCO allows for a reduced rate of customs duty on specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business (sections 269C, 269D, and 269E). In the case of the expanded closed cell synthetic rubber slabs, the CEO determined that no such substitutable goods were produced, leading to the issuance of TCO No. 0619539. This order declares that these specific slabs are subject to a free rate of duty, which contrasts with the general rate of 5% (section 269P(3)).
The Act imposes specific obligations on both the CEO and applicants for a TCO. For the CEO, these include accepting valid applications, assessing whether the application meets the core criteria, and making a written order if the criteria are met (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, although in this case, no such submissions were received (subsection 269K(1)). On the part of the applicant, Gardiner Australia Pty Ltd, they must ensure their application is valid and meets the core criteria to be eligible for a TCO.
Breaches of the provisions under the Customs Act 1901 can result in various consequences, both civil and criminal. While the specific offences and penalties are not detailed in this explanatory statement, the Act generally provides for penalties, including fines and imprisonment, for non-compliance with its provisions. The exact penalties would be determined by the relevant sections of the Customs Act 1901 and any other applicable legislation.