EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829165
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.
Globa Rubber Pty Ltd applied for a TCO in respect of certain coupling agents on 02 September 2008.
Instrument
TCO No 0829165 was made on 28 November 2008. It declares that those certain coupling agents 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. 0829165 is taken to have come into force on 02 September 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 Commonwealth Parliament, provides a framework for the imposition of customs duties on imported goods. Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can apply lower rates of customs duty to certain goods. This legislative instrument was introduced to address the need for a streamlined process to provide tariff concessions on specific goods, ensuring that Australian businesses can compete effectively in the global market without undue financial burdens. The policy objective, as outlined in the Act, is to encourage the importation of goods that are not produced domestically, thus benefiting consumers and supporting the broader economic objectives of the nation. The Explanatory Statement for Tariff Concession Instrument No. 0829165, made under the Customs Act 1901, details the application process and the criteria for making a TCO, ensuring transparency and fairness in the decision-making process.
Scope and Application
The Customs Act 1901, specifically under Part XVA, enables the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which provide for a lower rate of customs duty on certain goods. The Act applies to any person who may apply to the CEO for a TCO in respect of goods, provided those goods are not specified in section 269SJ of the Act as ineligible for tariff concessions. The application process requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged, as per sections 269C and 269D of the Act. Once the CEO is satisfied that the application meets the core criteria, a written TCO is issued, effective from the day the application was lodged, as per subsection 269S(1) of the Act. The TCO does not retroactively affect any rights or liabilities of persons other than the Commonwealth, ensuring that existing rights and obligations remain unaffected. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this case. The TCO extends its benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0829165 under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S. These sections (269C, 269B, 269D, 269E, 269F, 269P) outline the process and criteria for the Chief Executive Officer of Customs (the CEO) to assess and grant a Tariff Concession Order (TCO). Specifically, section 269C stipulates that a TCO application meets 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 term "substitutable goods" is defined in section 269E as goods produced in Australia that can be used in the same way as the goods for which the TCO is being sought. If the CEO determines that the application meets these criteria, section 269P(3) mandates that a written TCO be issued, declaring the specific goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on the parties involved, particularly the CEO, include ensuring that the TCO application adheres to the specified criteria, as outlined in section 269C. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting any person who may have objections to the TCO to submit their concerns. Additionally, the CEO must decide whether the application meets the core criteria and, if so, issue a TCO (section 269F). Furthermore, the CEO is required to ensure that the rights of individuals are not adversely affected by the TCO and that no liabilities are imposed on anyone except the Commonwealth (section 269S).
Under the Customs Act 1901, breaches of the provisions related to Tariff Concession Orders can result in significant consequences. While the explanatory statement does not explicitly detail specific offences, penalties, or civil/criminal consequences for breach, it is clear that non-compliance with the Act’s provisions could lead to legal action. Given the nature of the Act and its regulations, breaches might result in fines, legal disputes, or other penalties as determined by relevant authorities. The maximum penalties would depend on the specific breach and would be determined in accordance with the relevant sections of the Customs Act 1901 and any other applicable legislation.