EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949779
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.
Petrocoating Systems applied for a TCO in respect of certain protective coating film on 22 December 2009.
Instrument
TCO No 0949779 was made on 12 March 2010. It declares that those certain protective coating film 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. 0949779 is taken to have come into force on 22 December 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. 0949779 was enacted in 2010 under the Customs Act 1901. This legislation addresses the need to provide tariff concessions for specific goods to promote economic efficiency and competitiveness in the Australian market. The Customs Act 1901 allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide lower rates of customs duty on certain goods if no substitutable goods are produced in Australia. In this instance, Petrocoating Systems applied for a TCO for certain protective coating films, and the CEO determined that no substitutable goods were produced domestically, thereby satisfying the core criteria. As a result, a TCO was issued, granting these goods a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. The policy objective is to enhance the competitiveness of Australian industries by reducing the cost of imported goods, thereby benefiting importers and potentially consumers.
Scope and Application
The Tariff Concession Instrument No. 0949779, made under Part XVA of the Customs Act 1901, applies to specific protective coating films that were the subject of an application by Petrocoating Systems. The instrument grants a tariff concession to these goods, reducing the rate of duty from the general rate of 5% to free, provided that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. This instrument is applicable to the Commonwealth and extends to any entities or individuals importing these specific protective coating films into Australia. The concession is effective as of the date the application was lodged, 22 December 2009, and does not impose any liabilities on persons other than the Commonwealth. The instrument does not affect any existing rights of persons other than the Commonwealth but provides benefits to importers who can now apply for a refund of duty paid on these goods imported since the effective date. The instrument operates within the legislative framework provided by the Customs Act 1901 and the Customs Tariff Act 1995, with no exclusions noted in this specific case.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0949779 under the Customs Act 1901, involve the process and criteria for granting Tariff Concession Orders (TCOs) (sections 269C, 269P(3)). These sections require that an application for a TCO must meet core criteria, which include the absence of substitutable goods being produced in Australia at the time the application was lodged (section 269C). If the Chief Executive Officer (CEO) of Customs is satisfied with the application, they must make a written order (the TCO) declaring that the goods in question are subject to a specific rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). In this case, the TCO No. 0949779 declares that certain protective coating films are to be treated under item 50 of Schedule 4, with a duty rate of free, as opposed to the general rate of 5%.
The Act imposes several obligations on the parties involved, most notably on the CEO of Customs. Upon receiving a valid TCO application, the CEO must determine whether the application meets the core criteria for a TCO (section 269C). If the criteria are met, the CEO must issue a written TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be granted (subsection 269K(1)). In the case of TCO No. 0949779, no submissions were received, facilitating the smooth implementation of the concession.
In terms of legal consequences, breaches of the conditions stipulated in a TCO or failure to comply with the requirements of the Customs Act 1901 could result in civil or criminal penalties. The specific penalties are not detailed within the provided text but typically, breaches of customs laws can lead to fines, imprisonment, or both, depending on the severity of the breach. For instance, section 24 of the Customs Act 1901 provides for penalties including fines up to $22,000 or imprisonment for up to five years, or both, for various offences related to the Act. The Customs Act also includes provisions for additional penalties under the Crimes Act 1914, which can apply to more serious breaches.