EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807602
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.
Trentcom APS Pty Ltd applied for a TCO in respect of certain high density polyethylene panels on 12 May 2008.
Instrument
TCO No 0807602 was made on 04 August 2008. It declares that those certain high density polyethylene panels 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. 0807602 is taken to have come into force on 12 May 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 provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders allow for lower rates of customs duty on specified goods, provided certain criteria are met. The problem or gap addressed by this legislation is the facilitation of trade by reducing the cost of importing certain goods that are not produced domestically, thereby encouraging economic efficiency and competition. The Tariff Concession Instrument No. 0807602, made under the authority of the Customs Act 1901, was introduced to provide a tariff concession for certain high-density polyethylene panels, granting them duty-free status. This instrument was enacted following an application by Trentcom APS Pty Ltd, and the decision was made by the Chief Executive Officer of Customs after considering the criteria for substitutable goods and the absence of any submissions against the concession. The policy objective, as outlined in the explanatory statement, is to support importers by reducing their duty costs and enhancing their competitive position in the market.
Scope and Application
The Customs Act 1901 applies to individuals, entities, and industries involved in the importation of goods into Australia, as well as the conduct and transactions related to the importation process. The Act's scope is national, applying across the Commonwealth, states, and territories. Specifically, the Act allows for the application of tariff concession orders (TCO) for certain goods, which can result in a lower rate of customs duty being applied. These concessions are administered by the Chief Executive Officer of Customs, who assesses applications based on whether there are no substitutable goods produced in Australia at the time of application. TCOs are subject to exclusions as outlined in section 269SJ, which lists goods ineligible for tariff concessions. The application process includes public consultation, as mandated by section 269K, although in the case of TCO No. 0807602, no submissions were received. The TCO does not retroactively affect the rights of any parties other than the Commonwealth and does not impose any new liabilities. Instead, it potentially benefits importers by allowing them to apply for refunds of duty paid on goods imported since the TCO's effective date.
Key Provisions
The main operative sections of this legislation (sections 269C, 269F, 269K, 269P, and 269S) provide the framework for the process of applying for, making, and commencing Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C requires the CEO to assess whether the application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the application meets these criteria, the CEO must make a written order (section 269P(3)) declaring that the goods are subject to a specified rate in Schedule 4 to the Customs Tariff Act 1995. Section 269K mandates the CEO to publish a notice in the Gazette inviting submissions if the application is accepted as valid, while section 269S states that a TCO is effective from the date the application was lodged.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application and assessment process for TCOs. An applicant must submit an application to the CEO for a TCO, ensuring it pertains to goods not specified in section 269SJ, which outlines goods ineligible for a TCO. The CEO must then assess the application against the core criteria stipulated in section 269C and, if satisfied, proceed to make the TCO. The CEO is also required to publish a notice in the Gazette under section 269K, inviting any interested parties to lodge submissions if they believe the TCO should not be made. Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on them in respect of actions taken before the TCO's registration.
The Act delineates specific consequences and penalties for breaches related to the making and application of TCOs. Although the Act does not explicitly state penalties for breaches, non-compliance with the requirements to publish notices or assess applications correctly could potentially lead to legal challenges or administrative reviews. The primary focus is on ensuring that the process for granting TCOs is fair and transparent, with a robust mechanism for public input. Any failure to adhere to these processes could result in the invalidation of the TCO, thereby reverting the applicable duty rates to their standard levels. The TCO itself ensures that it does not disadvantage any person other than the Commonwealth or impose liabilities for actions taken before its registration.