EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711532
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.
BASF Australia Pty Ltd applied for a TCO in respect of certain glass filled polyamide 6 resins on 29 August 2007.
Instrument
TCO No 0711532 was made on 22 February 2008. It declares that those certain glass filled polyamide 6 resins 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. One submission objecting to the TCO application was received from PolyPacific Pty Ltd.
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. 0711532 is taken to have come into force on 29 August 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. 0711532, enacted in 2008 under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods that are not produced domestically, thereby encouraging their importation and potentially reducing costs for importers. This instrument was introduced to streamline the process by which businesses can apply for tariff concessions on certain goods, ensuring that such concessions are granted in a timely and transparent manner. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with the provisions of the Customs Act, which empower the CEO to make Tariff Concession Orders (TCOs) for goods not produced in Australia. The primary objective of this legislative instrument is to facilitate the importation of goods by reducing or eliminating customs duties, thereby making these goods more affordable and accessible to businesses and consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply a reduced rate of customs duty on designated goods. This Act applies to individuals or entities seeking to import goods that can benefit from a lower customs duty rate if no substitutable goods are produced in Australia. The TCO scheme is applicable on a national level, as it operates under the Commonwealth jurisdiction. The Act explicitly excludes certain goods from being eligible for a TCO, as detailed in section 269SJ. The scope of the Act can be extended or restricted through subordinate instruments, such as regulations, which provide further definitions and guidelines for the application process. For instance, BASF Australia Pty Ltd successfully applied for a TCO for glass filled polyamide 6 resins, which were granted a zero duty rate starting from the date the application was lodged. This specific TCO was subject to public consultation, with objections considered before finalising the order.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0711532 under the Customs Act 1901 (section 269C) involve the establishment of a Tariff Concession Order (TCO) for certain glass filled polyamide 6 resins, which is subject to a zero rate of customs duty. The CEO of Customs must consider whether an application for a TCO meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If the CEO is satisfied, a TCO is issued, declaring that the goods in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995. The TCO, which was made on 22 February 2008, specifies that the glass filled polyamide 6 resins are subject to item 50 of Schedule 4, resulting in a free rate of duty as opposed to the general 5% rate.
The obligations imposed by this Act on the relevant parties include the requirement for the CEO to publish a notice in the Gazette when a TCO application is accepted as valid (subsection 269K(1)). This notice must include an invitation for any person who believes there are reasons why the TCO should not be made to submit their objections. Additionally, the CEO must ensure that the application meets the core criteria and that no substitutable goods are being produced in Australia at the time of the application. Importers are also given the right to apply for a refund of duty on goods imported since the day the TCO is considered to have come into force, as per paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs could result in civil or criminal consequences, although specific penalties are not detailed in the Explanatory Statement. However, it is clear that the TCO does not affect the rights of any person as at the date of registration in a manner that disadvantages them or imposes liabilities for actions taken before the registration date. The Act ensures that the rights of importers are beneficially affected by the TCO, but no liabilities are imposed on any person, including importers, under this specific instrument.