EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804763
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.
Fabtech S.A Pty Ltd applied for a TCO in respect of certain high density polyethylene geomembrane on 02 April 2008.
Instrument
TCO No 0804763 was made on 13 June 2008. It declares that those certain high density polyethylene geomembrane 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. 0804763 is taken to have come into force on 02 April 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. 0804763 was enacted under the Customs Act 1901 to address the issue of tariff concessions for specific goods. This instrument was introduced to provide a lower rate of customs duty for certain high density polyethylene geomembrane, as applied by the Chief Executive Officer of Customs. The instrument was created in response to an application by Fabtech S.A Pty Ltd, which sought a tariff concession on these particular goods. The legislation was enacted by the Parliament of Australia, with the aim of ensuring that the application of the concession does not disadvantage any person and does not impose liabilities on anyone in respect of actions taken before the registration date. The tariff concession does, however, provide beneficial rights to importers, including the ability to apply for a refund of duty on goods imported since the date the concession came into force.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at reducing customs duty on specific goods. This legislative provision applies to any person who wishes to apply for a TCO for goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. For an application to be successful, it must meet the core criteria set out in section 269C, namely that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The geographic reach of this Act is national, applying throughout Australia as it pertains to customs duties which are a federal matter. The application of the Act may be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which defines terms like 'substitutable goods' and 'ordinary course of business'. In the case of TCO No. 0804763, the CEO determined that the application met the criteria, and the order was published in the Gazette, with no objections received. This order, effective from the date the application was lodged, grants tariff concessions on certain high density polyethylene geomembranes, with the duty rate for these goods being reduced from the general rate of 5% to free.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). Section 269C of the Act details the core criteria that must be satisfied for an application for a TCO to be valid, primarily focusing on the absence of substitutable goods produced in Australia at the time the application is lodged (section 269P(3)). A TCO can only be made if the Chief Executive Officer of Customs (CEO) is satisfied that no such substitutable goods exist. Upon meeting these criteria, the CEO must issue a written TCO specifying the goods to which the concession applies and the rate of customs duty (section 269F). This particular TCO, No. 0804763, pertains to certain high-density polyethylene geomembranes, for which the duty rate is reduced from 5% to free.
The obligations and requirements imposed by the Act on the parties involved are fairly straightforward. An applicant, such as Fabtech S.A. Pty Ltd, must submit an application to the CEO for a TCO if they wish to benefit from a lower rate of customs duty on specific goods. The CEO, on receiving the application, has an obligation to determine whether it meets the core criteria as specified in the Act. If the application satisfies these criteria, the CEO must make a written TCO declaring that the goods in question are subject to the prescribed tariff concession (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not proceed (subsection 269K(1)). This ensures a degree of transparency and opportunity for interested parties to voice their concerns.
In terms of civil and criminal consequences for breach, the Customs Act 1901 does not explicitly detail penalties for non-compliance with the TCO provisions in this explanatory statement. However, the overarching legal framework under which the Customs Act operates implies that breaches could lead to civil penalties, including fines or other financial penalties, as well as potential criminal penalties such as imprisonment, depending on the severity and intent behind the breach. The specific penalties would be determined based on the broader provisions of the Customs Act and any related legislation.
The explanatory statement also clarifies that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, ensuring that no existing rights are disadvantaged or new liabilities imposed due to the TCO. This means that the TCO is prospective in nature, affecting only transactions occurring after its effective date. Importers, in particular, stand to benefit from this as they can apply for a refund of duty paid on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.