EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803251
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.
APC Socotherm Pty Ltd applied for a TCO in respect of certain epoxy powders on 26 February 2008.
Instrument
TCO No 0803251 was made on 9 May 2008. It declares that those certain epoxy powders 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. 0803251 is taken to have come into force on 26 February 2008.
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. 0803251, enacted in 2008, is a measure under the Customs Act 1901 to address the issue of applying for tariff concessions on certain goods that are not produced domestically. This instrument was introduced to facilitate the application process by APC Socotherm Pty Ltd for a tariff concession order (TCO) concerning specific epoxy powders, aiming to lower the customs duty from the general rate of 5% to free. The Customs Act 1901, enacted by the Australian Parliament, provides a framework for granting such tariff concessions to support industries that rely on imported materials not readily available in Australia. The policy objective of this instrument is to ensure that the application process is transparent and allows for public consultation while ensuring that the rights of importers are protected and any liabilities predating the TCO are not affected.
Scope and Application
The Tariff Concession Instrument No. 0803251 applies to specific goods, in this instance, certain epoxy powders, as identified by APC Socotherm Pty Ltd. The Act under which this instrument is issued, the Customs Act 1901, governs the application of tariff concessions by the Chief Executive Officer of Customs, provided the goods in question are not specified in section 269SJ of the Act as ineligible for such concessions. The instrument specifically pertains to goods that are not produced in Australia and have no substitutable goods produced domestically in the ordinary course of business, as determined by the CEO. Geographically, this Act operates under the Commonwealth jurisdiction, impacting all entities and individuals involved in the importation of the specified goods within Australia. The instrument is effective from the date the application was lodged, 26 February 2008, and it does not affect any rights or liabilities accrued before this date. The application of this tariff concession is further refined through the Customs Tariff Act 1995, which specifies the duty rates applicable to the goods post-concession.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0803251 under the Customs Act 1901 provide for the making of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO). Section 269F allows an application for a TCO to be made to the CEO in respect of certain goods. If the application meets the core criteria set out in section 269C, and is not in respect of goods that cannot be subject to a TCO as per section 269SJ, the CEO must make a written order (TCO) specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. The CEO must also ensure that there are no substitutable goods produced in Australia at the time the application is lodged, as per section 269P(3).
The obligations imposed by this legislation on parties and entities are primarily on the CEO of Customs. The CEO must determine if an application for a TCO meets the core criteria, specifically by verifying that no substitutable goods are produced in Australia in the ordinary course of business. If the CEO is satisfied with the application, they must make a written TCO and publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. The CEO must also ensure that the TCO does not adversely affect the rights of persons, other than the Commonwealth, in respect of actions taken before the TCO's effective date.
Breaching the requirements of the Customs Act 1901, such as incorrectly determining whether an application for a TCO meets the core criteria, could result in legal consequences. While the explanatory statement does not explicitly outline specific penalties for such breaches, the Customs Act 1901 provides for various offences related to customs duties and regulations. Penalties for contravening the Customs Act 1901 can include fines and imprisonment. For example, knowingly making a false statement to the CEO can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both, as per section 231A. Additionally, failure to comply with an order made under the Act can lead to penalties as specified in the relevant provisions.