EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714537
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.
The Mayo Group International Pty Ltd applied for a TCO in respect of certain carbon dioxide absorbants on 06 September 2007.
Instrument
TCO No 0714537 was made on 16 November 2007. It declares that those certain carbon dioxide absorbants 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. 0714537 is taken to have come into force on 06 September 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 Commonwealth Parliament, provides a framework for the administration of customs and excise in Australia. In 2007, Tariff Concession Instrument No. 0714537 was introduced to address a specific gap in the customs duty scheme by providing a lower rate of duty for certain goods that do not have substitutable alternatives produced domestically. This instrument was made under the authority of the Chief Executive Officer of Customs, who assessed and approved the application from Mayo Group International Pty Ltd for tariff concessions on certain carbon dioxide absorbants. The primary policy objective is to support importers by reducing the duty on these goods from the general rate of 5% to free, thereby potentially lowering costs and enhancing competitiveness without imposing any new liabilities on non-Commonwealth entities. The instrument came into effect from the date the application was lodged, and it does not disadvantage any person by affecting their rights as at the date of registration.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity that applies for a TCO in respect of goods, with the understanding that the application must meet certain core criteria as outlined in the Act. These criteria include the absence of substitutable goods produced in Australia at the time of application. The geographic reach of this Act is national, extending across Australia as a Commonwealth legislation. The Act does not impose any liabilities or disadvantage any person other than the Commonwealth in respect of actions taken before the registration date of a TCO. Additionally, the Act allows for the CEO to publish notices in the Gazette to invite submissions from interested parties regarding the validity of a TCO application, though no such submissions were received for TCO No. 0714537. This particular TCO, effective from 6 September 2007, applies to certain carbon dioxide absorbants, granting them a tariff concession that reduces the duty rate from 5% to free.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0714537, under the Customs Act 1901, involve the creation of a Tariff Concession Order (TCO) for specific carbon dioxide absorbants. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO. If the CEO determines that the application meets the core criteria specified in section 269C, the CEO is required to issue a written order. This order, as per section 269P(3), declares that the goods subject to the TCO application are to be treated under a prescribed item of Schedule 4 to the Customs Tariff Act 1995. For this specific TCO, item 50 of Schedule 4 applies, which sets the duty rate at free, down from the general rate of 5%.
The Act imposes certain obligations and requirements on the parties involved. An applicant must ensure that their application for a TCO complies with the criteria set out in section 269C. This includes proving that no substitutable goods are produced in Australia, as defined in section 269D. The CEO has the responsibility to review the application and determine if it meets the core criteria. If satisfied, the CEO must publish a notice in the Gazette, inviting submissions from any person who may have objections to the TCO. This requirement is outlined in subsection 269K(1). In this case, no submissions were received, which may have expedited the process.
Breaches of the provisions under this legislation could lead to civil or criminal consequences. The Customs Act 1901 does not explicitly state penalties for failing to comply with the TCO provisions. However, general provisions within the Act and related Acts may apply, such as fines or imprisonment for offences involving the importation of goods without proper documentation or under false pretences. It is important to note that while the TCO itself does not impose liabilities on any person, any subsequent misuse or fraud related to the concession could result in legal action. The specifics of penalties would depend on the nature of the breach and applicable laws.