EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711604
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 Ltd applied for a TCO in respect of certain polyethersulphone resins on 29 August 2007.
Instrument
TCO No 0711604 was made on 09 November 2007. It declares that those certain polyethersulphone 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. 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. 0711604 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 Customs Act 1901, enacted by the Parliament of Australia, established a framework for the imposition of customs duties on imported goods. The Act was amended to introduce Tariff Concession Orders (TCOs) under Part XVA, providing for a lower rate of customs duty on certain goods, contingent on specific criteria being met. This legislative change was introduced to address the need for more flexible and responsive trade policies that could better accommodate the dynamic nature of international trade and the economic interests of businesses within Australia. The policy objective was to ensure that the Australian market could access necessary goods at reduced costs, thereby promoting economic efficiency and competitiveness. The Tariff Concession Instrument No. 0711604, made in 2007, exemplifies the application of this framework by granting tariff concessions on certain polyethersulphone resins, reflecting the Act's intent to support Australian industries by adjusting customs duties in a manner that aligns with broader economic goals.
Scope and Application
The Tariff Concession Instrument No. 0711604, made under Part XVA of the Customs Act 1901, applies to specific goods identified by Basf Australia Ltd, which in this case are certain polyethersulphone resins. This legislation is directed at the Chief Executive Officer of Customs (CEO), who has the authority to make Tariff Concession Orders (TCO) that result in a lower rate of customs duty for the specified goods. The Act applies to the CEO's decision-making process when assessing applications for TCOs, ensuring that the goods in question do not have substitutable alternatives produced in Australia. The CEO must consider applications against the core criteria outlined in the Act, including the absence of substitutable goods produced domestically. The application of this legislation is national in scope, applying across all jurisdictions in Australia. Exclusions are specified in section 269SJ of the Act, detailing goods that cannot be subject to a TCO. The TCO No. 0711604, which came into force on 29 August 2007, declares that the certain polyethersulphone resins are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a free rate of duty for these goods. The legislation does not disadvantage any person by affecting their rights as at the date of registration nor does it impose any liabilities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0711604, under the Customs Act 1901 (section 269P), establish the framework for the concession, specifying the goods it applies to and the duty rates associated with these goods. The instrument, TCO No. 0711604, specifies that certain polyethersulphone resins are subject to a duty rate of free (section 269P(3)), as opposed to the general rate of 5% (section 269P). This instrument declares that these specific resins are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). The application process for such a concession requires the Chief Executive Officer of Customs (CEO) to assess whether the application meets the core criteria, which is defined by section 269C of the Customs Act 1901. The CEO must also publish a notice in the Gazette inviting submissions on the application (subsection 269K(1) of the Act), although in this instance, no submissions were received.
The obligations imposed on the parties governed by this Act are primarily centered around the application and assessment process for tariff concessions. According to section 269C, an application for a tariff concession order (TCO) must meet the core criteria, which includes the absence of substitutable goods produced in Australia on the day the application was lodged. The CEO is required to decide whether the application meets these criteria (section 269F) and must make a written order if satisfied (subsection 269P(3)). Additionally, the CEO is mandated to publish a notice in the Gazette (subsection 269K(1)) and consider any submissions received regarding the application. In this case, no submissions were received, thus the CEO proceeded with the order.
In terms of breaches and consequences, the Customs Act 1901 does not explicitly outline specific offences, penalties, or consequences for failing to comply with the provisions of a Tariff Concession Order. However, general provisions under the Customs Act could apply, including fines and imprisonment for breaches of customs regulations. For instance, subsection 126(1)(r) of the Regulations allows for the refund of duty on goods imported since the TCO is taken to have come into force, implying that any improper application or misuse of the concession could result in financial liabilities or penalties under the broader customs legislation. The TCO itself does not impose any liabilities on any person (subsection 269S(1)).