EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0913956
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.
Halliburton Pty Ltd applied for a TCO in respect of certain methylstyrene acrylate copolymer on 24 April 2009.
Instrument
TCO No 0913956 was made on 17 July 2009. It declares that those certain methylstyrene acrylate copolymer 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. 0913956 is taken to have come into force on 24 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 Tariff Concession Instrument No. 0913956 was enacted in 2009 as part of the Customs Act 1901, which provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This particular instrument was introduced to address the need for tariff concessions on certain methylstyrene acrylate copolymer, which were not being produced domestically in Australia at the time. The objective of this legislation, as outlined in the explanatory statement, is to provide tariff relief on these specific goods to ensure they are competitively priced in the Australian market, thereby encouraging their use and production within the country.
The Tariff Concession Instrument No. 0913956 was created under the authority of the Customs Act 1901, which is administered by the Parliament of Australia. The policy objective of this instrument, as stated in the explanatory statement, is to provide a tariff concession for certain methylstyrene acrylate copolymer, recognising that no substitutable goods were being produced in Australia at the time of the application. This concession aims to benefit importers by potentially reducing the cost of these goods, and by allowing for the refund of duty on imports since the instrument came into effect on 24 April 2009. The instrument ensures that no liabilities are imposed on any person, other than the Commonwealth, as a result of its enactment.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce customs duty on certain goods. These orders apply to goods that are not specified as ineligible under section 269SJ and meet the core criteria outlined in section 269C, which includes the condition that no substitutable goods are produced in Australia at the time of application. The instrument applies to entities such as importers and manufacturers of goods who can directly benefit from the tariff reductions by applying for a TCO, subject to the CEO’s approval. The geographic reach of this Act is national, as it pertains to goods imported into Australia. Exclusions include goods that are specified as ineligible in section 269SJ, and the application process involves public consultation as mandated by section 269K(1). The TCO No. 0913956, concerning certain methylstyrene acrylate copolymer, came into effect on 24 April 2009, the date the application was lodged, and it does not affect pre-existing rights or impose new liabilities on individuals or entities.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0913956 under the Customs Act 1901 (sections 269C, 269F, 269P, and 269SJ) establish the framework for the creation of Tariff Concession Orders (TCOs). Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. The CEO must then assess whether the application meets the core criteria outlined in section 269C, which includes determining if no substitutable goods were produced in Australia on the day the application was lodged (section 269D). If the application satisfies these criteria, the CEO must issue a written order, a TCO, specifying the lower rate of customs duty applicable to the goods (section 269P(3)). In this case, TCO No. 0913956 declares that certain methylstyrene acrylate copolymer is subject to a free rate of duty, reducing it from the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995).
The Act imposes several obligations on the parties and entities it governs. Firstly, the CEO of Customs must ensure that any TCO application does not pertain to goods specified in section 269SJ of the Act, which lists goods ineligible for a TCO. Upon receiving a valid application, the CEO must evaluate whether it meets the core criteria, particularly confirming that no substitutable goods were produced in Australia on the application date (section 269C). If the criteria are met, the CEO must promptly publish a notice in the Gazette, inviting submissions from any interested parties who may oppose the TCO (subsection 269K(1)). After considering any submissions, the CEO must decide whether to issue a TCO. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them for actions taken before the TCO's effective date.
Breaches of the provisions under the Customs Act 1901 can lead to both civil and criminal consequences. Specifically, subsection 269K(2) states that any person who knowingly makes a false or misleading statement in an application for a TCO may be liable for a civil penalty. The maximum penalty for such an offence is 500 penalty units or, in the case of a body corporate, 5,000 penalty units (subsection 269K(4)). Furthermore, knowingly using or dealing with goods that are the subject of a TCO in a manner that contravenes the conditions of the order can also result in criminal penalties. The maximum penalty for such an offence is 10,000 penalty units or imprisonment for five years, or both (subsection 269K(3)). These penalties underscore the importance of compliance with the legislative requirements governing TCOs.