EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937572
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.
Expanz International applied for a TCO in respect of certain expandable polystyrene on 01 March 2010.
Instrument
TCO No 0937572 was made on 30 December 2009. It declares that those certain expandable polystyrene 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. 0937572 is taken to have come into force on 01 March 2010.
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 Parliament of Australia, establishes a framework for the administration of customs and excise duties. It was introduced to regulate the importation and exportation of goods, ensuring compliance with Australia's trade obligations and facilitating the collection of necessary revenue. Part XVA of this Act provides for Tariff Concession Orders (TCOs), which the Chief Executive Officer of Customs can issue to grant tariff concessions on certain goods, thereby addressing specific economic needs or policy objectives such as promoting industry competitiveness or supporting particular sectors. The Tariff Concession Instrument No. 0937572, issued on 30 December 2009, exemplifies this by providing a tariff concession on certain expandable polystyrene, with the aim of benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Tariff Concession Order (TCO) No. 0937572 made under the Customs Act 1901 applies to certain expandable polystyrene goods for which a Tariff Concession Order has been applied and approved by the Chief Executive Officer (CEO) of Customs. The application of this TCO is limited to goods specified in the order and is contingent upon the CEO determining that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. This concession results in the application of a zero rate of customs duty on these goods, as opposed to the general rate of 5% applicable to similar goods not covered by the TCO. The geographic and jurisdictional reach of this Act is national, operating under the authority of the Commonwealth, and it specifically excludes goods that cannot be subject to a TCO as outlined in section 269SJ of the Customs Act 1901. The scope of the Act may be further defined or extended through subordinate instruments, but such extensions are not elaborated in the provided explanatory statement.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. Section 269F allows for applications to be made by any person seeking a TCO for specific goods, subject to the condition in section 269SJ that the goods are not excluded from the scheme. Once an application is deemed valid, section 269C outlines the core criteria that must be met, particularly that no substitutable goods are produced in Australia on the day the application is lodged. This is further defined in sections 269D and 269E, which clarify terms such as 'goods produced in Australia' and 'ordinary course of business', and in section 269P(3) which mandates that if these criteria are satisfied, a written TCO must be issued.
Under this legislative framework, the CEO has clear obligations. Upon receiving a valid application, the CEO must assess whether the application meets the core criteria (section 269C) and, if satisfied, issue a TCO (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any person who might oppose the TCO to submit their views (subsection 269K(1)). These obligations ensure a transparent process and allow for public input before a TCO is issued.
The Act also sets out specific consequences for non-compliance. While the explanatory statement does not detail specific penalties, breaches of the Customs Act 1901 can typically result in substantial fines and potential criminal charges, depending on the severity and intent of the breach. For instance, under section 226 of the Customs Act 1901, unauthorised importation or exportation of goods can lead to fines of up to $22,000 or imprisonment for up to five years, or both. Similarly, knowingly making false statements in connection with customs duty can incur penalties of up to $55,000 or imprisonment for up to ten years, or both, under section 227 of the Act. These severe penalties underscore the importance of adhering to the legislative requirements.