EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711473
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.
National Starch & Chemical Pty Ltd applied for a TCO in respect of certain ethylene vinyl acetate copolymer/terpolymer aqueous dispersions on 17 July 2007.
Instrument
TCO No 0711473 was made on 21 September 2007. It declares that those certain ethylene vinyl acetate copolymer/terpolymer aqueous dispersions 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. 0711473 is taken to have come into force on 17 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, as amended, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to reduce the rate of customs duty on certain imported goods. This was enacted to address a gap in tariff regulation by allowing the application for tariff concessions on goods that are not produced in Australia and for which no suitable domestic substitutes exist. The Act, enacted by the Australian Parliament, aims to facilitate trade by making imported goods more affordable and competitive within the domestic market. In this instance, Tariff Concession Instrument No. 0711473, issued on 21 September 2007, declared that certain ethylene vinyl acetate copolymer/terpolymer aqueous dispersions are subject to a reduced tariff rate of free, effective from 17 July 2007, following an application by National Starch & Chemical Pty Ltd. This instrument ensures that the rights of importers are preserved and can benefit from duty refunds for imports made since the commencement date of the concession.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the application of Tariff Concession Orders (TCO) which are instruments that may lower the rate of customs duty on certain goods. Specifically, a TCO applies to goods for which an application is made to the Chief Executive Officer of Customs (CEO), provided the goods are not specified in section 269SJ of the Act as ineligible for a TCO. The CEO must assess whether the application meets the core criteria, which are outlined in sections 269C, 269D, and 269E of the Act, primarily focusing on the absence of substitutable goods produced in Australia. If the criteria are satisfied, the CEO is mandated to issue a TCO, as occurred with TCO No. 0711473, which granted a tariff concession on certain ethylene vinyl acetate copolymer/terpolymer aqueous dispersions. This legislation applies nationally, affecting all entities importing these specified goods within Australia, and it does not disadvantage any existing rights or impose new liabilities on individuals or corporations. The TCO's effective date aligns with the application date, providing immediate benefits to importers who can apply for duty refunds on goods imported since the TCO's inception.
Key Provisions
The Customs Act 1901 (the Act) under which the Tariff Concession Order (TCO) No. 0711473 operates, primarily concerns the granting of tariff concessions by the Chief Executive Officer of Customs (the CEO) (s 269F). The Act outlines specific criteria that must be met for a TCO to be considered (s 269C). If the CEO determines that the application for a TCO meets these core criteria, the CEO must issue a written order (a TCO) stating that the goods specified in the application are subject to a prescribed rate of duty (s 269P(3)). For instance, in the case of TCO No. 0711473, certain ethylene vinyl acetate copolymer/terpolymer aqueous dispersions are declared as goods to which item 50 of Schedule 4 to the Tariff applies (s 269P(3)), thus reducing their duty rate to free.
The Act imposes certain obligations and requirements on both the applicant and the CEO. An applicant must ensure that their application for a TCO is not in respect of goods specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO (s 269F). Additionally, the CEO is required to consider whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions (s 269K(1)). However, in the case of TCO No. 0711473, no submissions were received.
In terms of penalties or consequences for breach, the Act does not explicitly state the penalties for non-compliance with its provisions. However, it is understood that failing to comply with the terms and conditions set out in a TCO could lead to civil or criminal consequences. The specifics of these consequences would depend on the nature and severity of the breach and could include fines or other legal actions. The Act ensures that the rights of a person (other than the Commonwealth) as at the date of registration will not be adversely affected, and the TCO does not impose any liabilities on any person (s 269S(1)). Therefore, the primary focus is on ensuring compliance to avoid any potential legal repercussions.