EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008091
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 applied for a TCO in respect of certain styrene acrylate polymers on 15 February 2010.
Instrument
TCO No 1008091 was made on 30 April 2010. It declares that those certain styrene acrylate polymers 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. 1008091 is taken to have come into force on 15 February 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, amended by Tariff Concession Instrument No. 1008091, was enacted to address the need for a streamlined process to grant tariff concessions on specific imported goods where no substitutable goods are produced in Australia. The instrument was developed to facilitate more efficient trade practices by providing reduced customs duty rates on particular goods, thereby encouraging importation and potentially boosting economic activity. This instrument was issued by the Chief Executive Officer of Customs under the authority granted by the Customs Act, aiming to ensure that the tariff concessions are applied in a manner that supports the policy objective of fostering competitive and efficient markets by reducing unnecessary trade barriers.
The instrument, which came into effect on 15 February 2010, was introduced following an application by Halliburton for tariff concessions on certain styrene acrylate polymers. The Customs Act's provisions enable the CEO to make such concessions if no substitutable goods are produced domestically, thereby ensuring that the concessions align with broader economic policy goals. The instrument specifies that the general duty rate of 5% is reduced to free for the targeted polymers, effective from the date the application was lodged. This legislative action reflects the policy objective of supporting the importation of goods that are not domestically produced, thereby enhancing market access and potentially reducing costs for businesses.
Scope and Application
The Customs Act 1901, as amended, encompasses provisions for Tariff Concession Orders (TCOs) under Part XVA, which allows for a lower rate of customs duty to be applied to certain goods. This scheme applies to any person or entity seeking a tariff concession for specific goods by applying to the Chief Executive Officer of Customs. The Act provides a process whereby, if the CEO determines that the goods in question are not listed in section 269SJ and meet the criteria set out in sections 269C, 269D, 269E and 269F, a TCO may be issued. Such orders are subject to national application across Australia and extend to the full breadth of the Commonwealth. The Act also outlines specific exclusions, such as those goods listed in section 269SJ, which are ineligible for a TCO. Any additional application details or restrictions are further defined through subordinate instruments, thereby extending or restricting the application of the primary Act as necessary.
Key Provisions
The primary operative sections of this legislation, referenced as F2010L02041, pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F of the Act allows for applications to the Chief Executive Officer (CEO) of Customs for a TCO on goods, with the CEO obligated to decide whether the application meets the core criteria (section 269C). A TCO is made when the CEO is satisfied that no substitutable goods are produced in Australia (section 269P(3)). This particular legislation, Tariff Concession Instrument No. 1008091, declares that certain styrene acrylate polymers are subject to a lower rate of duty, specifically free, rather than the general rate of 5% (section 269S(1)).
The obligations imposed by the Customs Act 1901 on the parties involved are primarily procedural. The CEO must ensure that applications for TCOs are processed in accordance with the criteria outlined in the Act. For applicants, such as Halliburton in this case, the obligation is to submit a valid application detailing the goods for which the tariff concession is sought. The CEO is also required to publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received, indicating that the CEO’s decision was unchallenged.
The legislation provides for specific consequences in the event of a breach of its provisions. However, the explanatory statement does not outline any specific offences, penalties, or civil/criminal consequences for breach under this TCO. Typically, breaches of customs regulations can lead to penalties such as fines or imprisonment, but these are not explicitly detailed in the provided text. The focus here is on the tariff concession process itself rather than punitive measures, ensuring that the rights of importers are protected and that the TCO does not disadvantage any person other than the Commonwealth (subsection 269S(1)).