EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0817111
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.
Donaghys Pty Limited applied for a TCO in respect of certain polyethylene yarn on 11 July 2008.
Instrument
TCO No 0817111 was made on 03 October 2008. It declares that those certain polyethylene yarn 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. 0817111 is taken to have come into force on 11 July 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 Parliament of Australia, establishes a framework for the administration of customs and excise duties, and among its provisions, it allows for the creation of Tariff Concession Orders (TCOs). These orders can reduce the customs duty on specified goods, which is particularly beneficial when the goods in question are not produced in Australia and there are no substitutable goods available domestically. The 2008 Explanatory Statement (F2008L04062) details the process and criteria for these concessions, ensuring that such orders are only granted when no Australian-made alternatives exist. The policy objective here is to support importers by reducing the duty on goods that are not locally produced, thus potentially lowering the cost of imported goods and making them more competitive in the market. The enactment of TCO No. 0817111 in October 2008, for instance, granted a tariff concession on certain polyethylene yarn, providing duty-free status to these imports as of the date the application was lodged, 11 July 2008.
Scope and Application
The Customs Act 1901 applies to any person or entity seeking to import goods into Australia, particularly those who may benefit from a Tariff Concession Order (TCO). The Act authorises the Chief Executive Officer of Customs to grant TCOs, which provide for a lower rate of customs duty on specified goods. This legislation is applicable across the Commonwealth of Australia, ensuring uniformity in the application of customs duties and tariff concessions. The Act excludes certain goods from being subject to a TCO as specified in section 269SJ, and it also provides that no substitutable goods must be produced in Australia in the ordinary course of business for an application to meet the core criteria. The geographic reach of this Act is national, impacting all importers within Australia. The TCO process allows for the application to be extended or restricted through subordinate instruments, ensuring flexibility in the application of the legislation to specific goods or circumstances.
Key Provisions
The main operative sections of this legislation include section 269C of the Customs Act 1901, which establishes the core criteria that a Tariff Concession Order (TCO) application must meet, and section 269P(3), which mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, a written order must be made (section 269P(3)). Section 269SJ specifies the goods that cannot be subject to a TCO, while section 269D and section 269E define the terms 'goods produced in Australia' and 'ordinary course of business', respectively. Section 269B clarifies the meaning of 'substitutable goods' in the context of a TCO application. Under this section, a TCO application is deemed to meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed on the parties by this legislation are primarily on the CEO, who must ensure that the TCO application meets the core criteria as defined by the Act. The CEO must also publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO as per section 269P(3). The CEO is also required to ensure that 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 (subsection 269S(1)).
There are no explicit offences or penalties mentioned in the provided text for breach of this legislation. However, failure to comply with the provisions of the Customs Act 1901 and the associated regulations could potentially result in civil or criminal consequences, depending on the nature and severity of the breach. It is also worth noting that the TCO does not impose any liabilities on any person and does not disadvantage any person (other than the Commonwealth) by affecting their rights as at the date of registration. Instead, the rights of importers will be beneficially affected, as they 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.