EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906705
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.
Antons Moulding applied for a TCO in respect of certain polystyrene foam board on 26 February 2009.
Instrument
TCO No 0906705 was made on 22 May 2009. It declares that those certain polystyrene foam board 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. 0906705 is taken to have come into force on 26 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 manage the import and export of goods, including the imposition of customs duty. The Act, administered by the Australian Parliament, provides a framework for the regulation of customs and border control. A significant aspect of this Act is the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA, which allows for a lower rate of customs duty on certain goods, provided specific criteria are met. This legislative tool was introduced to address the need for targeted relief on certain goods that might otherwise face prohibitive tariffs, encouraging trade and economic efficiency. The policy objective behind this mechanism is to support Australian businesses by reducing the cost of importing certain goods, thereby making them more competitive in the domestic market. In the case of Tariff Concession Instrument No. 0906705, the instrument aims to provide a tariff concession for specific polystyrene foam board, recognising that no substitutable goods were produced in Australia at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 0906705 under the Customs Act 1901 applies to entities or individuals who have applied for and received a Tariff Concession Order (TCO) for certain goods, in this case, specific polystyrene foam boards, where the goods are imported into Australia. The Act allows the Chief Executive Officer of Customs to grant tariff concessions if specific criteria are met, such as the absence of substitutable goods produced in Australia. This TCO instrument specifically relates to the concessional tariff treatment of these polystyrene foam boards, reducing the customs duty from 5% to free. The application of this Act is within the Commonwealth jurisdiction, impacting all states and territories of Australia. The application of the TCO is not retrospective and does not disadvantage any person other than the Commonwealth, nor does it impose any liabilities on entities or individuals. The Act also provides for the publication of TCO applications in the Gazette, inviting public submissions, though in this case, no submissions were received. The TCO comes into effect on the date the application was lodged, in this instance, 26 February 2009. Any person, other than the Commonwealth, who imported the goods since the TCO was taken to be in force may apply for a refund of duty under the Regulations.
Key Provisions
The Customs Act 1901, as amended, allows for the creation of Tariff Concession Orders (TCOs) through Part XVA. Section 269F permits an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. If the CEO determines that the application is valid and does not pertain to restricted goods outlined in section 269SJ, the CEO must then assess whether the application meets the core criteria established under section 269C. This requires the CEO to confirm that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If these criteria are satisfied, the CEO must issue a TCO, as mandated by subsection 269P(3), effectively applying a reduced rate of customs duty to the specified goods.
The obligations imposed on the CEO under this legislation are significant. Once a TCO application is deemed valid, the CEO must publish a notice in the Gazette, as stipulated by subsection 269K(1), inviting any interested party to lodge submissions opposing the TCO. If no submissions are received, the CEO must proceed with making the TCO. The TCO's effective date is set as the date the application was lodged, in accordance with subsection 269S(1). The TCO must also be crafted in such a way that it does not disadvantage any person or impose liabilities for actions taken prior to the TCO's effective date.
The legislation does not explicitly outline offences, penalties, or specific consequences for breaches within the TCO framework. However, non-compliance with the Customs Act 1901 generally may result in civil or criminal penalties. For instance, misleading or false statements in an application could lead to penalties under section 224A of the Act, with maximum fines of up to $22,200 for individuals and $111,000 for bodies corporate. Additionally, failure to declare goods or incorrect declarations could attract penalties under section 177, with potential fines and imprisonment. The specific penalties would depend on the nature and severity of the breach.