EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804179
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.
Tradechem Pty Ltd applied for a TCO in respect of certain pigments on 17 March 2008.
Instrument
TCO No 0804179 was made on 6 June 2008. It declares that those certain pigments 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. 0804179 is taken to have come into force on 17 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the administration of customs duties, including a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). These orders apply a lower rate of customs duty to specific goods, provided certain criteria are met. Tariff Concession Instrument No. 0804179, enacted in 2008, applies this scheme to certain pigments, reducing their duty rate from 5% to free, in recognition that no substitutable goods were produced in Australia. The CEO determined this after Tradechem Pty Ltd's application and subsequent review, with no objections raised during the consultation period. The instrument aims to support Australian businesses by potentially reducing costs associated with importing these pigments, thus facilitating trade and economic activity without imposing new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0804179 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on specific goods, which in this instance are certain pigments. The scope of the Act involves the application for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) who assesses whether the application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. The application process mandates the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. The geographic reach of this Act is national, as it operates under the Commonwealth framework, and the application is processed by the CEO on behalf of the Australian government. The Act explicitly excludes certain goods from being subject to a TCO, as outlined in section 269SJ of the Act. The TCO in question came into force on the date the application was lodged, which is 17 March 2008, and it provides relief by setting the duty rate for the specified pigments to free, down from the general rate of 5%. Importantly, the TCO does not affect the rights of any person as at the date of registration nor impose any liabilities on anyone other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0804179 (TCO No. 0804179) under the Customs Act 1901 (section 269F) allow for the application by Tradechem Pty Ltd for tariff concessions on certain pigments. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria (section 269C), a written order is to be made declaring that the pigments are subject to a lower rate of duty. This concession applies because no substitutable goods were produced in Australia at the time of the application (section 269P(3)).
The obligations and requirements imposed by the Act on parties such as Tradechem Pty Ltd and the CEO include the submission of a valid application under section 269F. The CEO must then ensure that the application meets the core criteria, specifically that no substitutable goods were produced in Australia at the time of the application (section 269C). The CEO must also publish a notice in the Gazette inviting any person who may have objections to lodge submissions (subsection 269K(1)). If no objections are received, the CEO must make the TCO, which is deemed to have come into force on the date the application was lodged (subsection 269S(1)).
In the case of a breach of the provisions of the Customs Act 1901, including the making of false statements in a TCO application, the penalties can be significant. Under section 264-20 of the Crimes Act 1914, a person who contravenes a provision of the Customs Act 1901 can be subject to a penalty of up to 10,000 penalty units for an individual and 50,000 penalty units for a body corporate, in addition to any other penalties prescribed by the Act. The TCO itself does not impose any liabilities on any person, and it does not affect the rights of a person (other than the Commonwealth) as at the date of registration (subsection 269S(1)).
The Tariff Concession Instrument No. 0804179 is beneficial for importers of the specified pigments, as they can apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations). This concession is particularly advantageous as it allows importers to avoid the general rate of duty, which is 5%, and instead benefit from a duty-free status for the pigments. The TCO provides clear guidance on the application process and the conditions under which the tariff concession is granted, ensuring compliance with the statutory requirements.