EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913316
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.
Tiwest Pty Ltd applied for a TCO in respect of certain titanium dioxide finishing plant on 22 April 2009.
Instrument
TCO No 0913316 was made on 10 July 2009. It declares that those certain titanium dioxide finishing plant 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. 0913316 is taken to have come into force on 22 April 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 by the Australian Parliament and serves to regulate the importation and exportation of goods, including the imposition of customs duties. This Act establishes a framework for the concession of tariffs on certain goods, addressing the need for a streamlined process to facilitate trade and reduce the burden on businesses importing specific items that are not produced domestically. The Tariff Concession Order No. 0913316, made under this Act, is an example of how the legislation can be applied to provide tariff relief for imported goods, as demonstrated by the case of Tiwest Pty Ltd, which successfully applied for a concession on titanium dioxide finishing plant. The policy objective of such measures is to support the economic efficiency and competitiveness of Australian businesses by ensuring they have access to necessary imported goods at reduced costs.
Scope and Application
The Customs Act 1901, under its Part XVA, establishes a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), with the primary aim of applying a lower rate of customs duty on specified goods. This legislation is applicable to any individual or entity seeking to import goods that meet the criteria for a TCO, provided they are not the types of goods explicitly excluded by section 269SJ of the Act. For a TCO to be granted, the CEO must determine that no substitutable goods are produced in Australia at the time the application is lodged, as per the definitions outlined in sections 269C, 269D, and 269E of the Act. Once the CEO confirms the application meets the core criteria, a written TCO is issued, declaring the applicable tariff on the specified goods. The geographic reach of this Act is national, as it operates under the authority of the Commonwealth of Australia. In the case of TCO No. 0913316, the CEO's decision to grant the concession for titanium dioxide finishing plant was based on the absence of substitutable goods produced in Australia, resulting in a duty-free status for these specific goods, effective from the date of the application on 22 April 2009.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0913316 under the Customs Act 1901 (section 269F) outline the process for applying for a Tariff Concession Order (TCO), which allows for a lower rate of customs duty on certain goods. The CEO of Customs must decide whether an application for a TCO meets the core criteria, as specified in sections 269C and 269P(3). If the application is approved, a TCO is issued, declaring that the goods in question are subject to a lower rate of duty, as specified in the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties it governs are primarily centred around the application process for a TCO. An applicant must ensure their application is not in respect of goods specified in section 269SJ of the Act, which prohibits certain goods from being subject to a TCO. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). The CEO must also ensure that any TCO issued meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Furthermore, the TCO itself must be in writing and specify the prescribed item of Schedule 4 to the Tariff that applies to the goods in question.
The legislation also outlines the potential consequences for breaches of the provisions under the Act. While the explanatory statement does not explicitly detail offences, penalties, or civil/criminal consequences, it is implied that non-compliance with the requirements for TCO applications could lead to the rejection of an application or the revocation of an issued TCO. The Act does not specify maximum penalties for breaches, but such breaches could result in the continued application of higher customs duty rates on the affected goods, which could lead to financial loss for the importer. Additionally, the failure to comply with the core criteria for issuing a TCO could result in the TCO being challenged or revoked, leading to potential liability for the importer or the entity benefiting from the TCO.