EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0707051
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.
IMCD Australia Ltd applied for a TCO in respect of certain polymerisation initiator preparations on 11 May 2007.
Instrument
TCO No 0707051 was made on 27 July 2007. It declares that those certain polymerisation initiator preparations 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. 0707051 is taken to have come into force on 11 May 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, establishes a framework for administering customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislation was introduced to address the need for flexibility in customs duties to encourage the importation of goods that are not produced domestically, thereby supporting competitive markets and economic growth. The Tariff Concession Instrument No. 0707051, made under this Act, specifically aims to provide a zero per cent duty rate for certain polymerisation initiator preparations, as determined by the Chief Executive Officer of Customs, ensuring that no substitutable goods were produced in Australia at the time of the application. The policy objective of this instrument is to facilitate the importation of these goods by reducing the financial burden on importers, thereby potentially increasing their availability in the Australian market.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, specifically those seeking tariff concessions. The Act encompasses a broad range of goods and transactions, with a focus on those that do not have substitutable alternatives produced domestically, as defined by the Act. The geographical scope of this Act is national, operating within the framework of the Commonwealth of Australia, and it is administered by the Chief Executive Officer of Customs. The Act does not apply to goods specified in section 269SJ, which excludes certain types from tariff concessions. The application of the Act can be further defined or modified through subordinate instruments, such as regulations or orders, which provide additional detail or exceptions to the primary legislation. For instance, Tariff Concession Orders (TCOs) can be made under the authority of the Act, specifying particular goods eligible for reduced customs duty rates based on the criteria outlined in the Act. These TCOs do not affect the rights of persons other than the Commonwealth and do not impose any liabilities on persons other than the Commonwealth in relation to actions taken prior to the registration of the order.
Key Provisions
The primary operative sections of the Customs Act 1901, as referenced in the explanatory statement, involve sections 269C, 269B, 269D, 269E, 269F, 269P(3), and 269K(1). These sections outline the process for applying for a Tariff Concession Order (TCO) and the criteria that must be met for such an order to be granted. Specifically, section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the CEO is satisfied that the application meets the core criteria, section 269P(3) mandates that the CEO must make a written order (a TCO) declaring that the goods in question are subject to a prescribed tariff item.
The obligations and requirements imposed by the Act on parties or entities include the necessity for applicants to demonstrate that the goods they seek a tariff concession for are not substitutable by any goods produced in Australia in the ordinary course of business. This involves providing evidence that no such substitutable goods exist, which must be substantiated on the day the application is lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO application, as stipulated in section 269K(1). The CEO must also ensure that no submissions are received that would prevent the making of the TCO.
The legislation outlines various consequences for breaches, though the specific offences and penalties are not detailed in the explanatory statement. Typically, under the Customs Act 1901, failure to comply with the terms of a TCO or any related requirements could result in civil or criminal penalties. For instance, penalties could include fines or imprisonment for those found guilty of knowingly or recklessly contravening the Act. However, the exact penalties would depend on the specific nature of the breach and the relevant provisions of the Customs Act 1901 or other applicable laws. The TCO itself, once made, does not impose any liabilities on persons other than the Commonwealth, ensuring that it does not disadvantage any individual or entity with respect to actions taken before the TCO's effective date.