EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041173
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 1041173 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. 1041173 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, enacted by the Commonwealth Parliament, addresses the need for a streamlined process to provide tariff concessions for certain imported goods that are not produced domestically. This legislative framework allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to importers, thereby reducing the customs duty on specified goods to zero if no substitutable goods are produced in Australia. This mechanism was introduced to support Australian industries by ensuring that domestic production is not adversely affected by cheaper imported alternatives. Instrument No. 1041173, which was made on 29 November 2010, exemplifies this process, as it grants a tariff concession for certain vinyl chloride and vinyl acetate copolymer resins, which will benefit importers by allowing them to apply for a refund of duty on goods imported since the concession was taken to have come into force on 07 September 2010.
Scope and Application
The Tariff Concession Instrument No. 1041173, made under the Customs Act 1901, pertains to specific vinyl chloride and vinyl acetate copolymer resins, and applies to the entities that import these goods into Australia. The scope of the Act extends to providing a lower rate of customs duty on these goods, as determined by the Chief Executive Officer of Customs, who is required to assess applications for Tariff Concession Orders (TCOs) against set criteria. The instrument was made on 29 November 2010, and it is effective as of the date the application was lodged, 7 September 2010, according to the provisions of the Customs Act. This concession does not affect any existing rights of persons other than the Commonwealth, nor does it impose any new liabilities, while providing beneficial rights to importers who can now apply for a refund of duty for goods imported since the commencement date. The application of this concession is limited to those goods specified in the instrument, and does not extend to other goods unless specifically covered by a different TCO.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1041173 are sections 269C, 269B, 269D, 269E, and 269P(3) of the Customs Act 1901. Section 269C sets out the core criteria that must be met for a Tariff Concession Order (TCO) application to be accepted, while section 269B defines key terms used in the Act. Section 269D outlines what constitutes 'goods produced in Australia', section 269E defines 'ordinary course of business', and section 269P(3) specifies that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order 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 applies. In this case, the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business for the vinyl chloride and vinyl acetate copolymer resins, and thus declared that the goods in question were subject to a free rate of duty.
The Act imposes several obligations and requirements on parties involved with TCOs. Firstly, under section 269F, a person may apply to the CEO for a TCO in respect of goods. The CEO is then required to determine whether the application meets the core criteria as outlined in section 269C. If the CEO is satisfied that the application meets the core criteria, they must make a written order 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 applies (section 269P(3)). Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as a valid application, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1) of the Act).
The Act also outlines various offences, penalties, and consequences for breach. Under section 270 of the Customs Act 1901, any person who contravenes the Act or the Regulations is liable to a penalty of up to 10,000 penalty units for a corporation and 2,000 penalty units for an individual. This includes any person who imports goods in a manner that contravenes the Customs Act 1901, the Customs Regulations 1993, or any Tariff Concession Order. Additionally, any person who makes a false or misleading statement in an application for a Tariff Concession Order may be liable to a penalty of up to 10,000 penalty units for a corporation and 2,000 penalty units for an individual (subsection 269Q(2) of the Act). It is important to note that penalties are subject to change and should be verified against the most up-to-date legislation.