EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939310
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.
Tytec Pty Ltd applied for a TCO in respect of certain compound rubber strips on 19 October 2009.
Instrument
TCO No 0939310 was made on 08 January 2010. It declares that those certain compound rubber strips 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. 0939310 is taken to have come into force on 19 October 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. 0939310, enacted in 2010, addresses the issue of providing tariff concessions for specific goods under the Customs Act 1901. This instrument was introduced to provide a mechanism whereby the Chief Executive Officer of Customs can apply a lower rate of customs duty to goods specified in a Tariff Concession Order (TCO), provided certain criteria are met. The Tariff Concession Orders scheme allows for the application of reduced customs duties on goods where it is determined that no substitutable goods are produced in Australia. This process is governed by the Customs Act 1901, which was enacted by the Australian Parliament, with the objective of facilitating trade by reducing the cost of importing certain goods. The instrument became effective from the date the application was lodged, ensuring that any rights of importers are protected without imposing any liabilities on them.
Scope and Application
The Tariff Concession Instrument No. 0939310 made under the Customs Act 1901 applies to certain compound rubber strips, as specified by Tytec Pty Ltd, providing a concession in the rate of customs duty. The Act allows for the application of a lower duty rate if specific criteria are met, namely that no substitutable goods are produced in Australia in the ordinary course of business. This applies to the industry involved in the importation of these specific rubber strips, granting them a benefit by reducing their duty obligations from the general rate of 5% to free. The instrument's application is national, extending across all jurisdictions within Australia as it is an instrument under the Commonwealth Act. The exemption from duty applies from the date the application was lodged, 19 October 2009, without retrospective effect, thus preserving pre-existing rights and obligations of parties other than the Commonwealth. The CEO’s decision to grant the concession was made without any objections from the public, indicating no grounds for the concession to be denied based on the submissions received.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for the application of a TCO, which applies a lower rate of customs duty to specified goods, provided certain criteria are met. Under section 269C, a TCO application must meet core criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business (section 269D and 269E). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, a written order must be made declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)).
The obligations imposed by this Act on the relevant parties primarily concern the CEO of Customs. The CEO must accept a valid TCO application and, as soon as practicable, publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). Once satisfied that the application meets the core criteria, the CEO must make a written TCO (section 269P(3)). The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO's registration date (subsection 269S(1)).
For breaches of the provisions outlined in this legislation, there are no explicitly stated offences or penalties in the provided text. However, the failure to adhere to the stipulated criteria for a TCO application or the improper making of a TCO could potentially lead to legal challenges or administrative actions. Any person adversely affected by the TCO might seek judicial review or other legal remedies, although specific penalties are not detailed in the provided text. The main consequences revolve around the rights of importers being affected, with potential rights to apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).