EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0709164
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.
Vesco Plastics (Australia) Pty Ltd applied for a TCO in respect of certain thermoplastic rods on 18 June 2007.
Instrument
TCO No 0709164 was made on 31 August 2007. It declares that those certain thermoplastic rods 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. 0709164 is taken to have come into force on 18 June 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 was enacted by the Parliament of Australia to establish the framework for the administration of customs duties and related matters. The Act provides for the imposition of customs duties on imported goods and the regulation of imports and exports. The Customs Act was introduced to address the need for a comprehensive legislative framework governing customs duties and import/export regulations, ensuring efficient revenue collection and trade control. Tariff Concession Instrument No. 0709164, made under the authority of the Customs Act 1901, addresses a specific gap by providing tariff concessions for certain goods. This instrument was introduced following an application by Vesco Plastics (Australia) Pty Ltd for tariff concessions on certain thermoplastic rods. The policy objective of this instrument is to provide relief from customs duties for goods where no substitutable goods are produced in Australia, thereby promoting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0709164 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, in this case, thermoplastic rods. The Act allows for the Chief Executive Officer of Customs to grant a Tariff Concession Order (TCO) that reduces the customs duty on goods not produced in Australia in the ordinary course of business. This concession is applicable to the goods specified in the TCO, which, in this instance, were declared to be free of duty as they are not produced domestically and serve a unique purpose. The instrument extends its jurisdiction throughout Australia and aligns with the overarching provisions of the Customs Act 1901, subject to the conditions and exclusions outlined within the Act. Notably, the TCO does not affect existing rights or impose new liabilities on any person or entity other than the Commonwealth, safeguarding against retroactive disadvantages or obligations for those who engaged in transactions before the TCO's effective date. Furthermore, the TCO does not extend to goods specified in section 269SJ of the Customs Act, which are ineligible for tariff concessions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0709164 under the Customs Act 1901 (section 269F) enable the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCOs) for certain goods, allowing for reduced or no customs duty to be applied. Section 269C stipulates that a TCO can be issued if no substitutable goods are produced in Australia, which is defined in sections 269D and 269E. If the CEO determines that the core criteria are met, they must issue a written order as per section 269P(3), specifying the reduced duty rate or waiving it entirely.
The Act imposes several obligations on the parties involved. Firstly, an applicant must ensure their application meets the core criteria, specifically demonstrating that no substitutable goods are produced in Australia (section 269C). The CEO must then assess the application against these criteria and make a decision based on the evidence provided. If satisfied, the CEO is obligated to issue a TCO (section 269P(3)). Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections (subsection 269K(1)). The CEO in this case did not receive any submissions, leading to the issuance of TCO No. 0709164.
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences or penalties related to the issuance or application of TCOs. However, any breach of the customs duty provisions or fraudulent activities related to the importation of goods could lead to civil or criminal penalties under other sections of the Customs Act 1901. The penalties for such breaches can include fines and, in serious cases, imprisonment.
Finally, the commencement of the TCO is effective from the date of the application (subsection 269S(1)), which in this instance is 18 June 2007. Importantly, the TCO does not affect any pre-existing rights or impose new liabilities on any person other than the Commonwealth, ensuring that the rights of importers are protected and potentially benefiting them through duty refunds under Regulation 126(1)(r).