EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803832
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.
Borg Manufacturing Pty Limited applied for a TCO in respect of certain polyvinyl chloride film on 07 March 2008.
Instrument
TCO No 0803832 was made on 23 May 2008. It declares that those certain polyvinyl chloride films 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. 0803832 is taken to have come into force on 07 March 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. 0803832, enacted in 2008, amends the Customs Act 1901 to facilitate tariff concessions for specific goods, thereby addressing the need for reduced customs duties on imported items where no Australian-made equivalents exist. This instrument was developed to streamline the process for businesses to apply for tariff concessions, ensuring they are not disadvantaged by higher duties on imported goods when no suitable domestic alternatives are available. The Tariff Concession Orders (TCOs) are issued by the Chief Executive Officer of Customs, following applications that meet the criteria outlined in the Customs Act 1901, particularly where no substitutable goods are produced in Australia. The policy objective is to support industries by reducing the cost of imported materials, thereby enhancing their competitiveness without imposing liabilities on other parties.
The Customs Act 1901, enacted by the Australian Parliament, provides the legislative framework under which these tariff concessions are granted. The explanatory statement clarifies that the tariff concession granted to Borg Manufacturing Pty Limited for certain polyvinyl chloride films effectively lowers the customs duty rate from the general rate of 5% to free, effective from the date of application. This initiative aims to benefit importers by potentially allowing them to apply for duty refunds on goods imported since the TCO was taken to have come into force.
Scope and Application
The Tariff Concession Instrument No. 0803832, under Part XVA of the Customs Act 1901, applies to the granting of Tariff Concession Orders (TCOs) for specific goods by the Chief Executive Officer of Customs (CEO). This legislation is designed for entities or individuals seeking lower rates of customs duty on goods that meet the specified criteria, as long as no substitutable goods are produced in Australia in the ordinary course of business. The instrument allows for the application of a lower duty rate on goods subject to the TCO, effectively making them duty-free, provided that the CEO determines the application meets the core criteria. This process involves publishing a notice in the Gazette to invite objections to the TCO, although in this case, no submissions were received. The TCO takes effect from the date the application is lodged and does not affect any pre-existing rights or liabilities of persons other than the Commonwealth. Importers, however, can benefit from the TCO by applying for a refund of duty on goods imported since the commencement date of the TCO. The application of this Act is primarily governed by the Customs Act 1901, and its reach is contingent on the specific goods and their production status in Australia.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0803832 are sections 269C, 269F, 269P, and 269SJ of the Customs Act 1901. These sections outline the process for applying for a Tariff Concession Order (TCO) and the criteria the Chief Executive Officer of Customs (CEO) must consider in deciding whether to grant the order. Section 269F allows a person to apply to the CEO for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO, the CEO must then decide if the application meets the core criteria set out in section 269C. This involves ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In this case, no submissions were received. Additionally, the CEO must ensure that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the application day, as defined in sections 269D and 269E. If these criteria are satisfied, the CEO must make a written TCO declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Any failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. Although the Explanatory Statement does not detail specific offences, breaches of customs legislation generally attract penalties under the Customs Act 1901 and the Crimes Act 1914. For example, knowingly making a false statement or representation in an application for a TCO could result in a civil penalty of up to $22,200 for a corporation and criminal penalties, including fines and imprisonment, depending on the severity of the breach. The Act ensures that the rights of importers are beneficially affected and that no liabilities are imposed on any person for actions taken before the TCO’s registration date.