EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041172
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.
Imcd Australia applied for a TCO in respect of certain vinyl chloride and vinyl acetate copolymer resins on 07 September 2010.
Instrument
TCO No 1041172 was made on 29 November 2010. It declares that those certain vinyl chloride and vinyl acetate copolymer resins 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. 1041172 is taken to have come into force on 07 September 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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia. This Act was introduced to address the need for streamlined processes and clear guidelines in the administration of customs duties and tariffs, ensuring that trade is conducted efficiently while protecting national interests. The Parliament of Australia is the enacting body of this legislation, with the objective of facilitating trade and economic activity by establishing a robust customs system. Part XVA of the Act, which includes provisions for Tariff Concession Orders (TCOs), aims to provide relief from customs duty for specific goods under certain conditions, thereby promoting fair trade practices and economic growth. A TCO application process was established to allow businesses to apply for reduced duty rates on goods that are not produced domestically, provided they meet the specified criteria. This mechanism supports Australian industries by potentially reducing costs for imported raw materials and facilitating competitive pricing in the market.
Scope and Application
The Tariff Concession Instrument No. 1041172 under the Customs Act 1901 applies specifically to certain vinyl chloride and vinyl acetate copolymer resins, granting tariff concessions to these goods. This instrument is applicable to the entities or individuals importing these resins, and its primary aim is to reduce the customs duty rate from the general rate of 5% to free. The geographic reach of this Act is national, as it pertains to goods imported into Australia. The instrument was created in response to an application made by Imcd Australia, and it came into force on the date the application was lodged, 07 September 2010. The application process and the decision to grant the concession were conducted in accordance with the core criteria outlined in the Customs Act 1901, ensuring that no substitutable goods were produced in Australia at the time of application. The instrument does not impose any liabilities on any person and does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or incurs liabilities for actions taken prior to the instrument's registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1041172 (referred to as TCO No. 1041172) under the Customs Act 1901 (section 269F) pertain to the process of applying for and granting tariff concession orders (TCOs). Section 269F enables a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods, provided these goods do not fall under the exclusions specified in section 269SJ. If an application is made, section 269C outlines that the CEO must determine if it meets the core criteria, which involves confirming that no substitutable goods were produced in Australia on the date the application was lodged. If the CEO is satisfied that the application meets these criteria, a TCO is made under section 269P(3), declaring the goods to which a specific item in Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting them a lower rate of customs duty.
The obligations imposed by the Act on the parties governed by it are quite specific. The CEO of Customs must, upon receiving a valid application for a TCO, ensure it is published in the Gazette (subsection 269K(1)), inviting any person who might oppose the granting of the concession to lodge submissions. The CEO must also verify that the application meets the core criteria, which involves checking that no substitutable goods were produced in Australia on the application date. The Act mandates that a TCO comes into force on the day the application is lodged (subsection 269S(1)), which was 7 September 2010 for TCO No. 1041172. Additionally, the TCO must not disadvantage any person other than the Commonwealth or impose liabilities on any person in respect of actions taken before the registration date of the TCO.
Failure to comply with the requirements of the Customs Act 1901 or the provisions of a TCO may lead to various consequences. While the Act does not explicitly detail offences or penalties in the explanatory statement, it is understood that breaches of the Customs Act could result in civil or criminal penalties, including fines and imprisonment. The specifics of these penalties would be governed by other relevant sections of the Customs Act and associated regulations, but the maximum penalties can vary significantly depending on the severity and nature of the breach. For instance, under the Customs Act, serious breaches might result in fines of up to $22,200 for individuals and much higher amounts for corporations, along with potential imprisonment terms.