EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712014
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.
Visy Industries applied for a TCO in respect of certain polyethylene terephthalate injection moulding parts on 18 July 2007.
Instrument
TCO No 0712014 was made on 21 September 2007. It declares that those certain polyethylene terephthalate injection moulding parts 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 0%.
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. 0712014 is taken to have come into force on 18 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 to regulate the importation and exportation of goods within Australia, including the imposition of customs duties on imported goods. One of the mechanisms introduced by Part XVA of the Act is the Tariff Concession Order (TCO), which allows for a lower rate of customs duty on specified goods when certain criteria are met. The 2007 Explanatory Statement outlines the process for applying for and granting a TCO, ensuring that the application meets core criteria, such as the absence of substitutable goods produced in Australia. The instrument, Tariff Concession Instrument No. 0712014, was introduced to address the specific case of Visy Industries' application for a TCO on certain polyethylene terephthalate injection moulding parts, which received a duty rate reduction from 5% to 0%. This initiative was carried out by the Chief Executive Officer of Customs, who followed the legislative provisions and published a notice inviting submissions from interested parties, none of which were received. The TCO, effective from the date of the application, benefits importers by allowing them to apply for duty refunds without imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to reduce the rate of customs duty on certain goods. This applies to any individual or entity that meets the core criteria for a TCO, which requires that no substitutable goods are produced in Australia at the time of application. The TCO is a legislative instrument with a Commonwealth jurisdiction, extending to the entire nation. However, the Act excludes certain goods from being eligible for a TCO as specified in section 269SJ. The application process involves a public notice in the Gazette inviting objections, which was not received in the case of TCO No. 0712014. This TCO, issued on 21 September 2007, pertains to specific polyethylene terephthalate injection moulding parts, reducing their duty from 5% to 0%. The commencement date of the TCO is aligned with the application date of 18 July 2007, and it does not affect existing rights or impose new liabilities.
Key Provisions
Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) regarding certain goods. If the application is not in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO, the CEO must assess if the application meets the core criteria specified in section 269C. According to this section, the application will meet the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. To further clarify, section 269D defines "goods produced in Australia", section 269E defines "ordinary course of business", and section 269F defines "substitutable goods" as goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put.
The obligations under this legislation primarily involve the CEO of Customs who must make a decision on the TCO application based on whether the core criteria are met. The CEO must also ensure that any TCO application that meets the core criteria is translated into a written order, as specified in subsection 269P(3). Additionally, subsection 269K(1) mandates that as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any interested party to lodge a submission if they believe there are reasons why the TCO should not be made. The CEO is required to consider any such submissions before proceeding with the TCO.
The Act also outlines consequences for breaches, although it does not specify offences or penalties for failing to comply with the requirements of a TCO. However, it is worth noting that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the date of registration. It ensures that importers of such goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. The legislation is designed to benefit importers by reducing or eliminating customs duty on specified goods, provided the core criteria for a TCO are met.