EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907794
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.
Australasian Solvents And Chemicals applied for a TCO in respect of certain liquid epoxy resin on 05 March 2009.
Instrument
TCO No 0907794 was made on 29 May 2009. It declares that those certain liquid epoxy resin 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. 0907794 is taken to have come into force on 05 March 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. This Act was introduced to address the need for a structured approach to manage the import and export of goods, ensuring compliance with duty requirements and facilitating trade. The Tariff Concession Instrument No. 0907794, made under the Customs Act 1901, is an example of how the legislation is applied to provide specific relief to importers by offering tariff concessions on certain goods. This instrument was enacted by the Chief Executive Officer of Customs in response to an application by Australasian Solvents And Chemicals, aiming to reduce the customs duty on certain liquid epoxy resin from the general rate of 5% to free, provided that no substitutable goods were produced in Australia. The objective of this instrument is to benefit importers by potentially reducing their duty obligations, thereby promoting trade and economic efficiency.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce customs duty on specific goods. This legislative process applies to any person or entity seeking to import goods that are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. A TCO can be applied for if, 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 of the Act. Once the CEO determines that an application meets the core criteria, a written order is issued, specifying the goods and the reduced rate of duty applicable. For instance, Instrument TCO No. 0907794 was made for certain liquid epoxy resin, setting the duty rate at free, whereas the general rate is 5%. The Act mandates the CEO to publish notices in the Gazette inviting submissions from interested parties; however, in this instance, no submissions were received. The TCO becomes effective from the date the application was lodged, with no retrospective effect on existing rights or liabilities, ensuring that only future imports benefit from the concession.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) through Part XVA, where the Chief Executive Officer of Customs (CEO) can apply a lower rate of customs duty to certain goods. This process is initiated under section 269F, where a person can apply to the CEO for a TCO regarding specific goods. The CEO then evaluates whether the application meets the core criteria as stipulated in section 269C, which requires that, on the date the application is lodged, no substitutable goods were produced in Australia in the ordinary course of business. This definition of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are detailed in sections 269D, 269E, and 269F respectively.
Once the CEO is satisfied that the application meets the core criteria, a TCO is issued under section 269P(3), declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. This order effectively lowers the customs duty rate for the specified goods. For instance, in the case of Australasia Solvents And Chemicals, a TCO was issued on 29 May 2009, reducing the duty on certain liquid epoxy resin from the general rate of 5% to free.
The Act imposes several obligations on the parties involved. Firstly, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission. In this case, no submissions were received. Additionally, the CEO is required to ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities on them in respect of actions taken before the TCO's registration. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
In terms of consequences for non-compliance, the Act does not explicitly outline specific offences or penalties for breaching the provisions related to TCOs. However, any failure to adhere to the terms of the TCO or related legislative requirements could potentially result in legal actions or penalties as provided by other sections of the Customs Act or related regulations. The Act ensures that the TCO does not impose any liabilities on any person, safeguarding their rights and obligations in the process.