EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620222
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.
All Rubber Pty Ltd applied for a TCO in respect of certain compounded polychloroprene rubber on 28 December 2006.
Instrument
TCO No 0620222 was made on 23 March 2007. It declares that those certain compounded polychloroprene rubbers 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. 0620222 is taken to have come into force on 28 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 Australian Parliament, provides a framework for the regulation of customs duties and the administration of the Customs Tariff. Among its provisions, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) which can reduce the customs duty on specific goods. The Tariff Concession Instrument No. 0620222 was introduced to address the need for tariff concessions on certain compounded polychloroprene rubbers, as applied by All Rubber Pty Ltd. This instrument was created under the authority of the Chief Executive Officer of Customs, who assessed the application against the core criteria outlined in the Act, specifically ensuring that no substitutable goods were produced in Australia at the time of application. The primary policy objective here is to facilitate trade by providing duty concessions on goods that are not domestically produced, thereby potentially lowering costs for importers and encouraging the import of necessary goods.
Scope and Application
The Tariff Concession Instrument No. 0620222, made under the Customs Act 1901, applies to entities that import compounded polychloroprene rubber goods into Australia. Specifically, it targets importers who may benefit from a lower rate of customs duty as a result of the Tariff Concession Order (TCO). The scope of the Act extends to the entire Commonwealth of Australia, ensuring that the benefits of the TCO are available nationwide. It is pertinent to note that the TCO does not apply to any goods specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. Additionally, the CEO of Customs must ensure that no substitutable goods produced in Australia are capable of being used in place of the imported goods before granting a TCO. The instrument does not disadvantage any person's rights as they stood on the date of registration and does not impose liabilities on any person for actions taken prior to the TCO's effective date.
Key Provisions
The main operative sections of this legislation focus on the process of granting Tariff Concession Orders (TCOs) for certain goods, as outlined in sections 269F, 269C, 269P, and 269S. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO determines that the application is valid and meets the core criteria, specified in section 269C, they must make a written order that reduces the customs duty on the specified goods. Section 269P(3) provides that the CEO must make a TCO if satisfied that the application meets the core criteria, and section 269S specifies the effective date of the TCO. In this case, TCO No. 0620222 applies to certain compounded polychloroprene rubber, reducing the duty rate from 5% to free.
The obligations imposed on parties by this Act include the requirement for applicants to submit valid TCO applications that meet the core criteria. Section 269K(1) imposes an obligation on the CEO to publish a notice in the Gazette inviting submissions from any interested parties. This notice is to be published as soon as practicable after accepting a TCO application as valid. The CEO is also required to consider any submissions received and make a decision based on whether the application meets the core criteria. In this instance, the CEO did not receive any submissions opposing the TCO for compounded polychloroprene rubber.
The legislation also outlines the potential consequences for non-compliance. While the explanatory statement does not explicitly mention penalties for breaching the Act or the TCO, general provisions in the Customs Act 1901 and the Customs Tariff Act 1995 may apply. These could include fines or imprisonment for offences such as the importation of goods without the required duty being paid or fraudulent applications for TCOs. The maximum penalties would depend on the specific breach and relevant sections of the Acts. For example, under section 155 of the Customs Act, a person who commits an offence against the Act may be subject to a penalty of up to $22,200 or imprisonment for up to two years, or both.