EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0904229
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.
West Wadding applied for a TCO in respect of certain polystyrene foam on 09 February 2009.
Instrument
TCO No 0904229 was made on 01 May 2009. It declares that those certain polystyrene foam 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. 0904229 is taken to have come into force on 09 February 2009.
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 was enacted to provide a comprehensive framework for the regulation of customs and excise duties in Australia, including mechanisms for tariff concessions. In 2009, the Tariff Concession Instrument No. 0904229 was introduced by the Chief Executive Officer of Customs under the authority granted by the Customs Act. This instrument was developed to address the need for tariff concessions on specific goods, in this case certain polystyrene foam, to support industries where substitutable goods are not produced in Australia. The instrument aims to provide relief from customs duties, thereby fostering economic efficiency and competitiveness. This legislative action was undertaken by the Commonwealth Parliament, with the objective of ensuring that Australian industries can access necessary materials at reduced costs, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0904229 under the Customs Act 1901 applies to goods specified in the instrument, namely certain polystyrene foam, which now benefit from a reduced customs duty rate. This instrument is applicable to the Commonwealth and to any entity or individual importing these goods into Australia. The instrument is effective from the date the application was lodged, 09 February 2009, and aims to provide relief by reducing the duty rate from the general rate of 5% to free. The legislation ensures that no existing rights or liabilities of any person, other than the Commonwealth, are adversely affected by the issuance of the Tariff Concession Order. The CEO of Customs must make a written order if the application meets the core criteria, which in this case was satisfied as no substitutable goods were produced in Australia. The CEO's decision was made without any submissions opposing the concession, indicating broad acceptance or lack of opposition to the tariff reduction.
Key Provisions
The Tariff Concession Instrument No. 0904229, made under the Customs Act 1901, applies a zero rate of customs duty on certain polystyrene foam as of 09 February 2009 (section 269S(1)). This was made possible after the Chief Executive Officer of Customs (CEO) determined that the application by West Wadding met the core criteria, which include the absence of substitutable goods produced in Australia at the time of the application (section 269C). The CEO's decision is further supported by the definitions provided in sections 269D, 269E and 269F of the Act.
Entities and individuals subject to this Act must ensure compliance with the core criteria when applying for tariff concessions. Specifically, they must demonstrate that the goods in question are not substitutable by any Australian-produced goods, as outlined in section 269D. Additionally, they must submit their application in accordance with the procedural requirements, including timely publication in the Gazette as per section 269K(1). The CEO's decision-making process requires careful consideration of these criteria to avoid any legal challenges or non-compliance issues.
Breach of the conditions set out in the Act or the Tariff Concession Instrument could result in significant legal consequences. While the explanatory statement does not specify exact penalties, violations of customs laws generally carry severe penalties under the Customs Act 1901, including fines and imprisonment. The severity of these penalties underscores the importance of strict adherence to the requirements and obligations outlined in the Act.