EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704421
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.
Yatala Plastics Pty Ltd applied for a TCO in respect of certain corrugated pipe coilers on 26 March 2007.
Instrument
TCO No 0704421 was made on 15 June 2007. It declares that those certain corrugated pipe coilers 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 0%.
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. 0704421 is taken to have come into force on 26 March 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. 0704421, enacted in 2007 under the Customs Act 1901, addresses the need for tariff concessions for specific goods that are not produced domestically, thereby reducing customs duty rates. This legislation, created by the Chief Executive Officer of Customs (CEO) pursuant to section 269F of the Customs Act, applies to Yatala Plastics Pty Ltd's application for certain corrugated pipe coilers, granting them a 0% duty rate under item 50 of Schedule 4 to the Tariff. The objective is to ensure that no substitutable goods are produced in Australia, thereby supporting the import of these goods without imposing any additional burdens or liabilities on importers or other stakeholders. The instrument came into effect on 26 March 2007, the date the application was lodged, and benefits importers by potentially allowing them to claim refunds for duties paid on these goods since that date.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0704421, facilitates the application of reduced customs duties on specified goods through Tariff Concession Orders (TCOs). This legislation applies to any person or entity seeking to import goods that can benefit from a tariff concession, provided the goods do not fall under the categories specified in section 269SJ of the Act. The Act operates at the national level across Australia, with the Chief Executive Officer of Customs (CEO) being the authority responsible for making decisions on TCO applications. The scope of the Act is further refined by the criteria outlined in sections 269C, 269B, 269D, and 269E, which define when a TCO can be granted, particularly focusing on the absence of substitutable goods produced in Australia. The TCO, once issued, reduces the customs duty rate for the specified goods, as demonstrated in the case of Yatala Plastics Pty Ltd's corrugated pipe coilers, for which the duty rate was reduced from 5% to 0%. The Act also includes procedural requirements such as the publication of applications in the Gazette to allow for public submissions, although no submissions were received in this case. The TCO's effective date aligns with the application date, and it does not retroactively affect the rights or liabilities of any parties other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0704421 pertain to the application and approval process for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the application does not involve goods that cannot be subject to a TCO (as outlined in section 269SJ), the CEO must then determine whether the application meets the core criteria set forth in section 269C. The core criteria require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied that the application meets these criteria, they are required to make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes specific obligations and requirements on both the applicants and the CEO. For applicants, the primary obligation is to ensure that their application is valid and pertains to goods that meet the criteria for a TCO. This involves demonstrating that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. For the CEO, the obligations include accepting the application, determining whether it meets the core criteria, and if so, issuing a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as outlined in section 269K(1). In the case of TCO No. 0704421, no submissions were received, and the CEO proceeded to issue the TCO as Yatala Plastics Pty Ltd's application met the necessary criteria.
There are no specific offences or penalties mentioned in the legislation for breaches of the provisions related to TCOs. However, any failure to comply with the conditions set out in the Act, such as incorrectly applying for a TCO for goods that are not eligible, could lead to administrative or legal consequences. For instance, if a TCO is issued in error and subsequently found to be invalid, there could be implications for the parties involved, including the potential need to repay any customs duties that were improperly remitted. The Act ensures that the rights of importers will be beneficially affected, and under the Regulations, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. Importantly, the TCO does not impose any liabilities on any person other than the Commonwealth.