EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000757
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.
Gibson Operations applied for a TCO in respect of certain styrene monomer on 01 March 2010.
Instrument
TCO No 1000757 was made on 29 March 2010. It declares that those certain styrene monomer 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. 1000757 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 Tariff Concession Instrument No. 1000757, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods. This instrument was created to provide relief from customs duty for certain styrene monomer, a type of chemical, by granting a tariff concession order (TCO) reducing the duty rate from the general rate of 5% to a rate of free. This initiative was aimed at supporting businesses that import these specific goods by reducing their import costs, thereby potentially lowering the costs of goods and services that depend on these chemicals. The instrument was developed following an application from Gibson Operations and after ensuring no objections were raised during the consultation period as mandated by the Customs Act 1901. The instrument came into force on the date of the application, 1 March 2010, ensuring that importers could benefit from the tariff reduction immediately.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes the framework for Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on certain goods. This Act applies to any person or entity that seeks to import goods into Australia and may benefit from a TCO if the Chief Executive Officer of Customs determines that the application for such a concession meets the stipulated criteria. The primary criterion is that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This determination is made in accordance with the definitions provided by sections 269D, 269E, and 269F of the Act. The application process also requires adherence to the exclusions listed in section 269SJ of the Act, which specifies certain goods that cannot be subject to a TCO. The Act applies nationally across Australia, administered by the Commonwealth. Any TCO made under this legislation does not affect existing rights or impose liabilities on persons other than the Commonwealth regarding actions taken before the TCO was registered. The Tariff Concession Instrument No. 1000757, made under this Act, specifically addresses styrene monomer, setting the duty rate at free where previously it was 5%, effective from the date of application, 01 March 2010.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for the creation of Tariff Concession Orders (TCOs) through Part XVA. These orders, issued by the Chief Executive Officer of Customs (CEO), can result in lower customs duties for specific goods (s 269F). For instance, a TCO application may be submitted by any person seeking a concession, and if the CEO determines that the goods are not excluded by section 269SJ and meet the core criteria, a TCO may be issued. The core criteria require that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged (s 269C).
Entities or individuals affected by this Act must adhere to several obligations. Firstly, when applying for a TCO, applicants must ensure that their application is valid and that the goods do not fall under the category of those specified in section 269SJ. They must also be aware that the CEO will publish a notice in the Gazette, inviting submissions from any interested parties, as stipulated by subsection 269K(1). Additionally, the CEO has the responsibility to evaluate applications against the core criteria and make a written TCO if the application is deemed eligible (s 269P(3)). Once a TCO is issued, it is considered to have come into force on the date the application was lodged (s 269S(1)).
The Act outlines specific offences and penalties for breaches of its provisions. While the explanatory statement does not detail specific penalties for breaches related to TCOs, general penalties for breaches of the Customs Act can include fines and imprisonment. For instance, under section 252 of the Customs Act, a person who contravenes any provision of the Act may be liable to a penalty of up to $11,100 for a corporation and $2,220 for an individual, or both imprisonment for up to two years and the fines mentioned. It is important to note that the maximum penalties can vary based on the nature and severity of the offence.
In summary, the key provisions of the Customs Act 1901 and the explanatory statement for Tariff Concession Instrument No. 1000757 establish a clear process for the creation and implementation of TCOs. These provisions require applicants to ensure their goods meet the eligibility criteria and for the CEO to evaluate applications accordingly. Compliance with these obligations is crucial to avoid potential civil or criminal consequences under the Act.