EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710731
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.
DIC Australia Pty Limited applied for a TCO in respect of certain strontium chromate pigments on 03 July 2007.
Instrument
TCO No 0710731 was made on 14 September 2007. It declares that those certain strontium chromate pigments 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. 0710731 is taken to have come into force on 03 July 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 Australian Parliament to regulate and facilitate international trade by imposing customs duties on imported goods and providing mechanisms for tariff concessions where appropriate. The Act was introduced to address the need for a comprehensive regulatory framework governing customs duties and trade facilitation. The Tariff Concession Instrument No. 0710731, enacted in 2007, further refines the Act by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods, provided certain criteria are met. The primary objective of this legislation is to ensure that the application of tariff concessions does not disadvantage Australian producers while facilitating trade by reducing import costs for specific goods, thereby supporting economic efficiency and competitiveness.
Scope and Application
The Tariff Concession Instrument No. 0710731, made under the Customs Act 1901, applies to the specific goods known as certain strontium chromate pigments. The application for a Tariff Concession Order (TCO) was made by DIC Australia Pty Limited on 3 July 2007, and the CEO was satisfied that these goods qualified for the concession as no substitutable goods were produced in Australia. Consequently, a lower rate of customs duty, specifically free, applies to these pigments as opposed to the general rate of 5%. The instrument extends to the Commonwealth jurisdiction, and its scope is limited to the particular goods specified in the application. The TCO does not disadvantage any person and does not impose any liabilities on any person. The instrument came into force on 3 July 2007, the day the application was lodged. No exclusions or exemptions are noted in this particular instance, and the application of the TCO is straightforward without any subordinate instruments extending or restricting its application.
Key Provisions
The Customs Act 1901 (the Act) under which this Tariff Concession Order (TCO) is made, provides that the Chief Executive Officer of Customs (the CEO) may issue TCOs that lower the rate of customs duty on specified goods. For a TCO to be issued, section 269F of the Act stipulates that an application must be made to the CEO, provided the goods are not specified in section 269SJ of the Act, which lists those that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order, the TCO, declaring that the specified goods are subject to a prescribed rate of duty as outlined in Schedule 4 to the Customs Tariff Act 1995 (the Tariff). The TCO will only apply if no substitutable goods are produced in Australia as defined in section 269D and produced in the ordinary course of business as defined in section 269E. For the purposes of section 269C, substitutable goods are those produced in Australia that are put, or are capable of being put, to a use that corresponds to the use to which the goods subject to the TCO can be put. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions on why the TCO should not be made. The TCO is deemed to come into force on the day on which the application for the TCO was lodged, as per subsection 269S(1) of the Act.
The Act imposes several obligations on the parties or entities it governs. The CEO must decide whether an application for a TCO meets the core criteria as per section 269C of the Act. If satisfied, the CEO must make a written TCO, as per subsection 269P(3). The CEO must also publish a notice in the Gazette inviting submissions on the application, as per subsection 269K(1). The rights of importers will be beneficially affected, and under paragraph 126(1)(r) of the Regulations, they 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.
Breaching the provisions of the Customs Act 1901 could result in criminal or civil consequences. The maximum penalty for offences under the Act is a fine of up to 10,000 penalty units or imprisonment for up to 10 years, or both, as per section 283 of the Act. The maximum penalty for making a false or misleading statement in an application for a TCO is a fine of up to 1,100 penalty units or imprisonment for up to 12 months, or both, as per subsection 283(2) of the Act. The maximum penalty for contravening a TCO is a fine of up to 1,100 penalty units or imprisonment for up to 12 months, or both, as per subsection 283(3) of the Act. It is important to note that these penalties are subject to change and may vary depending on the specific circumstances of the offence.