EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702861
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 styrene butadiene rubber sheets on 23 February 2007.
Instrument
TCO No 0702861 was made on 18 May 2007. It declares that those certain compounded styrene butadiene rubber sheets 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. 0702861 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 Customs Act 1901, enacted by the Australian Parliament, addresses the need for streamlined customs duty processes through the establishment of a scheme for Tariff Concession Orders (TCOs). This Act facilitates the application for lower customs duty rates on certain goods, provided they meet specific criteria such as not having substitutable goods produced in Australia. The policy objective is to enhance trade efficiency and support Australian industries by reducing the duty burden on particular imported goods. The process involves applications to the Chief Executive Officer of Customs, who determines eligibility based on the goods' substitutability and local production status. All Rubber Pty Ltd's application for compounded styrene butadiene rubber sheets was approved, resulting in a tariff concession from the general rate of 5% to a free rate, effective from the application date of 23 February 2007. The legislation ensures that no adverse effects on existing rights or liabilities arise from the concession, while potentially benefiting importers through duty refunds for goods imported since the concession took effect.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any individual or entity seeking a concession on the customs duty for goods imported into Australia. The scope of the Act extends to various goods, provided they meet specific criteria, such as not being substitutable goods produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it pertains to the application of customs duties across all states and territories within Australia. The Act allows for the application of concessions through subordinate instruments, such as the Tariff Concession Instrument No. 0702861, which provides tariff relief for certain compounded styrene butadiene rubber sheets. The Act also includes provisions for public consultation when considering TCO applications and ensures that the rights of third parties are protected against any disadvantages arising from the issuance of a TCO. The commencement of a TCO is backdated to the date of application, ensuring that importers can benefit from the concession for goods imported since that date.
Key Provisions
The key operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269K, 269P, 269S, and 269SJ (section 269C). These sections outline the criteria for applying for a TCO, the conditions under which the Chief Executive Officer (CEO) of Customs must make a written order, and the process for consulting with interested parties. For instance, section 269F allows a person to apply for a TCO in respect of goods, while section 269K requires the CEO to publish a notice in the Gazette if a TCO application is accepted as valid, inviting submissions from any person who believes the TCO should not be made.
The Act imposes several obligations and requirements on the parties or entities it governs. Firstly, the CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO (section 269F). Secondly, if the CEO is satisfied that the application meets the core criteria, such as no substitutable goods being produced in Australia in the ordinary course of business, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Lastly, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting submissions (section 269K(1)).
There are potential civil and criminal consequences for breaches of the Act. However, the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences related to TCOs. It is essential to consult the full text of the Customs Act 1901 and related regulations for a comprehensive understanding of the penalties that may apply in case of non-compliance. It is worth noting that the explanatory statement confirms that the TCO does not impose any liabilities on any person, and the rights of importers will be beneficially affected, including the ability to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.