EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702860
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 styrene butadiene rubber sheeting on 23 February 2007.
Instrument
TCO No 0702860 was made on 18 May 2007. It declares that those certain styrene butadiene rubber sheeting are goodsis a product 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. 0702860 is taken to have come into force on 23 February 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. 0702860 was enacted in 2007 as part of the Customs Act 1901 to address the need for tariff concessions on specific imported goods. This instrument was introduced to allow the Chief Executive Officer of Customs to grant tariff concessions to certain imported goods, thereby reducing the customs duty on these items. The instrument was established to provide a streamlined process for importers to apply for and potentially benefit from reduced customs duties on goods that are not produced in Australia, ensuring that Australian consumers and businesses have access to competitively priced imported goods. The Australian Parliament enacted this instrument to support economic efficiency and consumer choice by facilitating lower tariffs on specific goods, thereby reducing the overall cost of imported products.
Scope and Application
The Customs Act 1901, through Part XVA, provides the framework for Tariff Concession Orders (TCOs), which are made by the Chief Executive Officer of Customs. The application of this legislation is directed towards any individual or entity seeking to lower the customs duty on imported goods by demonstrating that no substitutable goods are produced in Australia. A TCO is applicable to specific goods that meet the core criteria outlined in section 269C, ensuring that such goods are not specified under section 269SJ, which lists those goods that cannot be subject to a TCO. The scope of this Act extends to the entire Commonwealth of Australia, thereby affecting national trade practices and import duties. Any exclusions or exemptions are clearly defined within the Act, ensuring that the application of a TCO is strictly regulated. The Act may also extend or restrict its application through subordinate instruments, such as regulations or orders, which provide additional detail or clarification on specific aspects of the legislation.
Key Provisions
The Tariff Concession Instrument No. 0702860, made under section 269F of the Customs Act 1901 (the Act), applies to certain styrene butadiene rubber sheeting. Section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO), which reduces the rate of customs duty on the goods in question. For the TCO to be issued, the CEO must be satisfied that the application meets the core criteria set out in section 269C, which includes that no substitutable goods are produced in Australia at the time the application is lodged (section 269D defines 'substitutable goods' and 'ordinary course of business' in this context). Once the CEO determines that the application meets these criteria, they must issue a written TCO, specifying the reduced duty rate (subsection 269P(3)).
The obligations imposed by the Act on the parties involved are primarily centred on the application process and the criteria for granting a TCO. All Rubber Pty Ltd, the applicant in this instance, must ensure their application complies with the requirements of the Act, particularly the core criteria in section 269C. The CEO is obligated to review the application, consider any submissions received in response to the Gazette notice (subsection 269K(1)), and make a decision based on whether the application meets the criteria. Once a TCO is issued, the Act mandates that it comes into force on the date the application was lodged (subsection 269S(1)). The CEO must also ensure that the rights of non-Commonwealth entities are not adversely affected by the TCO, and that no new liabilities are imposed by the order (subsection 269S(1)).
There are no specific offences or penalties outlined in the Act or the Explanatory Statement for breaches related to the issuance or application of a TCO. However, any general breaches of the Customs Act 1901, including those related to the application process or misrepresentations in an application, could result in civil or criminal penalties. The maximum penalties for breaches of the Customs Act can vary widely depending on the nature and severity of the offence, and can include substantial fines and imprisonment. The specific consequences would be determined by the relevant provisions of the Act and any applicable regulations.
The Tariff Concession Instrument No. 0702860 provides significant relief to importers of certain styrene butadiene rubber sheeting by reducing the duty rate to zero. This benefit is contingent on the application meeting the criteria outlined in the Act, and the CEO's satisfaction that no substitutable goods are produced in Australia at the time of application. The process ensures that the rights of importers are positively affected, while safeguarding against any adverse impacts on non-Commonwealth entities. Any failure to comply with the requirements or misrepresentation in the application process could potentially lead to legal consequences under the broader framework of the Customs Act 1901.