EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712904
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 styrenic copolymer resin on 15 August 2007.
Instrument
TCO No 0712904 was made on 19 October 2007. It declares that those certain styrenic copolymer 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. 0712904 is taken to have come into force on 15 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. 0712904 was enacted under the Customs Act 1901 to address the specific issue of providing tariff concessions for certain goods, in this case, certain styrenic copolymer resins. This instrument was introduced to ensure that the Chief Executive Officer of Customs could make orders that result in a lower rate of customs duty for these goods, provided that they meet the core criteria outlined in the Act. The primary objective of this legislation is to facilitate trade by reducing the customs duty on particular imported goods, thereby making them more competitively priced in the Australian market.
The instrument was enacted by the Parliament of Australia and aims to streamline the process for obtaining tariff concessions, ensuring that the application of such concessions is transparent and accessible. This measure is designed to benefit importers by potentially reducing their costs and enhancing their competitiveness, without imposing any new liabilities or disadvantaging existing parties as of the date of registration.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the application of tariff concessions on certain goods through Tariff Concession Orders (TCOs) that can be issued by the Chief Executive Officer of Customs (CEO). This legislative framework is designed to provide relief from customs duties on goods that are not being produced domestically in the ordinary course of business, thereby promoting trade and economic efficiency. The Act applies to entities or individuals who wish to import goods that could potentially benefit from reduced customs duties if the CEO determines that no substitutable goods are produced in Australia. The CEO must ensure that the goods in question do not fall under the list of ineligible items specified in section 269SJ before considering the application against the core criteria outlined in sections 269C and 269F. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, granting tariff concessions on the specified goods. The TCO instrument, such as TCO No. 0712904, applies from the date the application was lodged, and in this instance, it pertains to certain styrenic copolymer resins, granting them a duty-free status. This process ensures that the rights of importers are positively impacted while preventing any disadvantages or new liabilities for individuals or entities that may have engaged in transactions before the TCO was issued.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0712904 under the Customs Act 1901 (the Act) revolve around the issuance of a Tariff Concession Order (TCO) for certain styrenic copolymer resins. Under section 269F, a person can apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application is not for goods specified in section 269SJ, which are ineligible for TCOs, the CEO must assess whether it meets the core criteria as outlined in section 269C. The core criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The definitions of "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
The obligations imposed by this Act on the parties involved primarily concern BASF Australia Ltd, the applicant for the TCO, and the CEO, who is responsible for the assessment and issuance of the order. BASF Australia Ltd must ensure that their application adheres to the requirements of section 269F and that the goods in question meet the core criteria specified in section 269C. Once BASF Australia Ltd lodges a valid application, the CEO must publish a notice in the Gazette, as stipulated in subsection 269K(1), inviting submissions from any interested parties. If no submissions are received, the CEO is required to proceed with the issuance of the TCO.
Should any party contravene the provisions of the Customs Act 1901, various offences, penalties, or civil/criminal consequences may arise. However, the explanatory statement does not specify any particular offences, penalties, or consequences directly related to the issuance of TCO No. 0712904. Generally, breaches of the Customs Act could lead to penalties including fines and imprisonment, as outlined in other sections of the Act and the Customs Regulations 1993. Nonetheless, the specific penalties applicable to this TCO are not detailed in the explanatory statement. The TCO itself does not impose any liabilities on any person and does not affect the rights of persons other than the Commonwealth as at the date of registration.