EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909765
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.
Combined Group Of Companies applied for a TCO in respect of certain polyisobutylene planer forms on 23 March 2009.
Instrument
TCO No 0909765 was made on 05 June 2009. It declares that those certain polyisobutylene planer forms 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. 0909765 is taken to have come into force on 23 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, enacted by the Australian Parliament, includes a scheme under which Tariff Concession Orders (TCOs) can be made to provide relief from customs duty for specific goods. This was introduced to address the need for a streamlined process to lower customs duty rates for certain goods, thereby promoting trade and economic efficiency. The Customs Act empowers the Chief Executive Officer of Customs to grant these concessions if certain criteria are met, particularly if no substitutable goods are produced in Australia. Instrument No. 0909765, made under this Act, provides a tariff concession for certain polyisobutylene planer forms, resulting in a reduced duty rate from 5% to free. This legislative instrument was designed to ensure that the rights of importers are positively affected, allowing them to seek refunds for duties paid on these goods since the concession took effect on 23 March 2009, without imposing any new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism is designed to apply a lower rate of customs duty on goods, provided the application meets specific core criteria outlined in the Act. The process involves an application to the CEO, who must determine if the goods in question are substitutable by products manufactured in Australia and produced in the ordinary course of business. If the CEO finds that no such substitutable goods are produced domestically, they are obligated to issue a TCO, thereby reducing the customs duty on the specified goods. This legal framework applies to individuals and entities seeking tariff concessions on imported goods, ensuring that the concessions do not disadvantage existing rights and do not impose new liabilities. The application of TCOs is nationwide, reflecting the Commonwealth's jurisdiction over customs duties.
The scope of this legislation extends to any goods that are subject to a valid TCO application, and it applies to all entities involved in the importation of such goods, including importers who benefit from potential duty refunds on previously imported goods under certain regulatory provisions. The Act does not specify exclusions other than those outlined in section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act may also be extended or modified through subordinate instruments, although these are not detailed in the explanatory statement.
Key Provisions
The Tariff Concession Instrument No. 0909765 under the Customs Act 1901 (section 269P(3)) establishes that certain polyisobutylene planer forms are subject to a concessionary tariff rate, effectively making the duty on these goods free. Previously, the general rate of duty for these goods was 5%. This instrument was issued following an application by Combined Group Of Companies on 23 March 2009, and it came into effect on the same date (subsection 269S(1)).
The Act requires the Chief Executive Officer of Customs (CEO) to ensure that no substitutable goods are produced in Australia when considering a Tariff Concession Order (TCO) application. If the CEO is satisfied that no such goods are produced, they must make a written order (section 269C). For the TCO No. 0909765, the CEO determined that no substitutable goods were produced in Australia, leading to the concession. Additionally, the CEO is mandated to publish a notice in the Gazette, inviting submissions on the proposed TCO (subsection 269K(1)), although no submissions were received for this TCO.
Entities and individuals governed by the Customs Act 1901 must comply with the requirements for applying for and receiving a TCO. Specifically, applicants must ensure their goods meet the criteria set out in section 269C, and the CEO must adhere to the provisions of section 269P(3) when deciding on a TCO application. The Act ensures that the TCO does not retroactively affect the rights or impose liabilities on any person other than the Commonwealth (subsection 269S(1)).
Failure to comply with the requirements set forth in the Customs Act 1901 could result in civil or criminal consequences. Although the explanatory statement does not specify penalties, breaches of customs legislation generally carry significant penalties. Under Australian law, unauthorised importation of goods or incorrect declarations can lead to fines and imprisonment. The severity of penalties depends on the nature and extent of the breach, but they can be substantial, reflecting the seriousness of evading customs duties.
The Tariff Concession Instrument No. 0909765 provides a clear framework for the application and effect of TCOs under the Customs Act 1901, ensuring that the tariff concessions apply correctly and that both applicants and the CEO understand their respective roles and obligations. The lack of submissions in response to the Gazette notice indicates public acceptance of the decision, but adherence to the statutory requirements remains crucial to avoid any legal repercussions.