EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0700429
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.
Kimberly-Clark Australia Pty Ltd applied for a TCO in respect of certain skin sealant resins on 10 January 2007.
Instrument
TCO No 0700429 was made on 30 March 2007. It declares that those certain skin sealant resins 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. 0700429 is taken to have come into force on 10 January 2007.
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. 0700429, enacted in 2007 under the Customs Act 1901, was introduced to address the need for providing tariff concessions for specific goods that are not produced in Australia and are not substitutable by locally manufactured alternatives. This instrument allows for the application of a lower rate of customs duty for the specified goods, thereby facilitating their importation. The enacting body responsible for this instrument is the Chief Executive Officer of Customs, who is mandated by section 269F of the Act to consider applications for Tariff Concession Orders (TCOs) and to assess whether they meet the core criteria as outlined in sections 269C, 269D, and 269E of the Act. The policy objective of this legislation is to support industries by reducing the cost of importing certain goods that are crucial for their operations but not produced domestically. This approach aims to enhance competitiveness without imposing any liabilities on individuals or entities for actions taken prior to the order’s registration.
Scope and Application
The Customs Act 1901 applies to all individuals and entities involved in the importation of goods into Australia, as well as to the goods themselves. Specifically, the Act applies to the application process for Tariff Concession Orders (TCOs), which are subject to the criteria set out in the Act, including the absence of substitutable goods produced in Australia. The geographic and jurisdictional reach of this legislation is national, as it pertains to the entire Commonwealth of Australia. The scope of the Act is further extended through subordinate instruments, such as Tariff Concession Instrument No. 0700429, which declares specific goods to which a TCO applies. This particular instrument pertains to skin sealant resins, for which a zero rate of customs duty is now applicable. The Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ, and does not impose any liabilities on individuals or entities other than the Commonwealth. The application process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions from interested parties, although no submissions were received in response to the notice for TCO No. 0700429.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0700429, made under the Customs Act 1901, provide for the granting of a Tariff Concession Order (TCO) for certain skin sealant resins. Section 269F of the Act allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria specified in section 269C, a TCO is issued, which applies a lower rate of customs duty to the specified goods. In this case, the skin sealant resins specified in TCO No. 0700429 are subject to a duty-free rate, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person may apply to the CEO for a TCO in respect of goods, as provided under section 269F. The CEO must then assess whether the application meets the core criteria set out in section 269C, which includes determining if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO must also publish a notice in the Gazette, inviting submissions from any person who considers that there are reasons why the TCO should not be made, as required by subsection 269K(1). Once a TCO is issued, it comes into effect on the day the application for the TCO was lodged, in accordance with subsection 269S(1).
There are no specific offences, penalties, or civil/criminal consequences outlined in the Act or the explanatory statement for breaching the provisions of a TCO. However, the Act does include general provisions for penalties and enforcement that would apply in the event of non-compliance with customs laws, including the provisions of a TCO. For example, section 239 of the Customs Act 1901 provides for penalties for various offences, including the offence of attempting to evade customs duty, which carries a maximum penalty of 10 years imprisonment or a fine of up to $22,000, or both. The explanatory statement does not provide information on specific penalties or consequences for breach of the TCO.
Overall, Tariff Concession Instrument No. 0700429 provides for the granting of a TCO for certain skin sealant resins, which applies a lower rate of customs duty to those goods. The Act imposes obligations on applicants and the CEO, including the requirement to assess whether an application meets the core criteria and to publish a notice in the Gazette inviting submissions from interested parties. While there are no specific penalties or consequences outlined in the Act or the explanatory statement for breach of the TCO, general provisions for penalties and enforcement apply in the event of non-compliance with customs laws.