EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720574
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.
Network Marketing Pty Ltd applied for a TCO in respect of certain pvc foam on 03 December 2007.
Instrument
TCO No 0720574 was made on 29 February 2008. It declares that those certain pvc foam 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. 0720574 is taken to have come into force on 03 December 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 Order No. 0720574, enacted under the Customs Act 1901, was introduced to provide tariff concessions for certain PVC foam products, addressing the need for reduced customs duty on goods that are not produced in Australia and for which no substitutable goods are available domestically. This instrument was developed to facilitate more affordable imports of these specific goods by reducing their duty rates to zero, thereby promoting economic efficiency and encouraging the importation of goods that are not locally manufactured. The order was made by the Chief Executive Officer of Customs following an application by Network Marketing Pty Ltd on 3 December 2007, and it came into effect on the same date, offering immediate benefits to importers by allowing them to apply for duty refunds on goods imported from the effective date. The process involved no public submissions against the order, indicating broad acceptance of the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0720574 under the Customs Act 1901 applies to goods for which an application has been made and approved by the Chief Executive Officer of Customs. Specifically, it applies to certain PVC foam products that were the subject of an application by Network Marketing Pty Ltd on 03 December 2007. The Act allows for the granting of Tariff Concession Orders (TCOs) which result in a lower rate of customs duty for the specified goods. This concession is available for goods that are not substitutable with products produced in Australia and that meet the core criteria outlined in the Act. The geographic reach of the Act is national, as it pertains to customs duties which are a Commonwealth matter. The Act does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person in respect of actions taken before the TCO was registered. The TCO itself came into force on 03 December 2007, the date the application was lodged. Additionally, the Act allows for the extension or restriction of the application of TCOs through subordinate instruments, though no such extensions or restrictions are noted in this specific instance.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0720574 under the Customs Act 1901 (section 269C, 269F, 269P) establish the framework for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on specified goods. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO for goods, provided they are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO determines that the application meets the core criteria outlined in section 269C, they must issue a TCO. Section 269P(3) then mandates the CEO to make a written order declaring that the goods are subject to a specified duty rate as per Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for the CEO to assess TCO applications against the criteria set out in section 269C. This involves ensuring that no substitutable goods are produced in Australia at the time of the application, as defined by sections 269D and 269E. Once satisfied, the CEO must make a written TCO and publish a notice in the Gazette (subsection 269K(1)) inviting submissions from interested parties. In this case, Network Marketing Pty Ltd applied for a TCO concerning certain PVC foam on 3 December 2007, which was granted on 29 February 2008, as the CEO found no substitutable goods were produced in Australia.
Any breach of the provisions of the Act or failure to comply with the obligations and requirements can lead to various civil or criminal consequences. While the specific penalties are not detailed in the explanatory statement, under the Customs Act 1901, breaches can generally result in penalties including fines or imprisonment. The exact penalties would depend on the nature and severity of the breach, with the maximum penalties being determined by the relevant sections of the Act and any associated regulations. The TCO itself does not impose liabilities on any person, and it does not affect the rights of individuals or entities as at the date of registration in a manner that would disadvantage them or impose liabilities for actions taken prior to the registration date.