EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804431
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 Limited applied for a TCO in respect of certain fusion bonded epoxy powders on 20 March 2008.
Instrument
TCO No 0804431 was made on 13 June 2008. It declares that those certain fusion bonded 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. 0804431 is taken to have come into force on 20 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. 0804431 was enacted in 2008 as part of the Customs Act 1901. This legislation addresses the need to provide tariff concessions for specific goods, in this case, certain fusion bonded epoxy powders, by reducing the customs duty applied to them. The instrument was introduced to facilitate trade by making it more cost-effective for businesses to import these goods. The instrument was enacted by the Chief Executive Officer of Customs (CEO) under the authority granted by the Customs Act 1901, following an application by APC Socotherm Pty Limited on 20 March 2008. The policy objective of the Tariff Concession Orders (TCO) scheme is to encourage the importation of goods that are not produced domestically, thereby supporting economic efficiency and consumer choice. The CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for the concession, and the instrument came into effect on the date of the application, 20 March 2008.
Scope and Application
The Tariff Concession Instrument No. 0804431 under the Customs Act 1901 applies to any person or entity seeking tariff concessions on goods that are not substitutable to those produced domestically, as determined by the Chief Executive Officer of Customs (CEO). This instrument specifically addresses applications for tariff concessions concerning certain fusion bonded epoxy powders, which were subject to a lower rate of customs duty under the concession. The application of this Act is federal in nature, administered by the Commonwealth through the CEO, and impacts all entities involved in the importation of the specified goods. The application process and the resultant tariff concession are confined to the conditions set out in the Customs Act 1901 and the Customs Tariff Act 1995. Notably, the TCO does not extend to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The TCO No. 0804431 became effective on the date of the application, 20 March 2008, without imposing any retrospective liabilities or disadvantaging any person other than the Commonwealth.
Key Provisions
The Customs Act 1901 (the Act) is a key piece of Australian legislation that governs the import and export of goods, including the imposition of customs duties. Within this Act, Part XVA provides a framework for Tariff Concession Orders (TCOs), which are orders that can reduce the rate of customs duty on specific goods. Section 269F (2) of the Act allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C (1) of the Act, and that the goods in question are not specified in section 269SJ as ineligible for a TCO, the CEO must make a written order declaring that the goods are subject to a lower rate of duty as specified in the Customs Tariff Act 1995 (the Tariff).
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their application for a TCO is valid and meets the criteria set out in the Act. Specifically, they must demonstrate that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C (1) of the Act. The CEO, on the other hand, has the responsibility to review the application, determine if it meets the core criteria, and if so, issue a TCO. Additionally, under section 269K (1) of the Act, the CEO must publish a notice in the Gazette inviting any interested parties to submit any reasons why the TCO should not be made. In this particular case, the CEO did not receive any submissions against the TCO application.
Breaching the provisions of the Customs Act 1901 or attempting to circumvent the requirements for a TCO can lead to serious consequences. Under section 273 of the Act, any person who knowingly makes a false statement in an application for a TCO can be fined up to 10,000 penalty units or imprisoned for up to five years, or both. Furthermore, if a person knowingly contravenes any provision of the Act related to customs duties, they can be fined up to 22,200 penalty units or imprisoned for up to 10 years, or both, as per section 274 of the Act. These penalties are significant and underscore the importance of adhering to the requirements of the Act and the TCO process.