EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1044225
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.
Plastral Pty Ltd applied for a TCO in respect of certain polyamide granules and or powder antioxidant on 28 September 2010.
Instrument
TCO No 1044225 was made on 20 December 2010. It declares that those certain polyamide granules and or powder antioxidant 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. 1044225 is taken to have come into force on 28 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 Tariff Concession Instrument No. 1044225 was enacted in 2010 as part of the Customs Act 1901, addressing the need for a streamlined process to provide tariff concessions on specific imported goods. This legislation allows the Chief Executive Officer of Customs to apply reduced customs duties on goods, provided they meet certain criteria, such as the absence of substitutable goods produced in Australia. The instrument was introduced to facilitate trade by reducing the cost of importing specified goods, thereby promoting economic efficiency and competitiveness. The instrument was enacted by the Australian government through the relevant legislative authority under section 269F of the Customs Act 1901, with the policy objective of enhancing trade by lowering the duty on certain imported goods, which ultimately benefits importers and contributes to a more competitive market.
Scope and Application
The Customs Act 1901, under its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods that are subject to a reduced rate of customs duty, provided that certain criteria are met. The application for a TCO must not pertain to goods specified in section 269SJ, which lists those goods ineligible for a TCO. The application is assessed against the core criteria outlined in section 269C, requiring confirmation that no substitutable goods are produced in Australia in the ordinary course of business. This assessment hinges on definitions stipulated in sections 269D and 269E, which respectively define 'goods produced in Australia' and 'ordinary course of business', and on the definition of 'substitutable goods' in section 269F. If the CEO determines that the application meets these criteria, they are mandated to issue a written TCO. This legislative process is applicable across the Commonwealth of Australia and encompasses entities or individuals who seek tariff concessions for specified goods. The geographic reach is national, with the process being overseen by the CEO of Customs. The TCO mechanism does not disadvantage any person or impose liabilities on individuals or entities for actions taken prior to the TCO's effective date, thereby safeguarding pre-existing rights. The Explanatory Statement for Tariff Concession Instrument No. 1044225 exemplifies this process, detailing a case where a TCO was granted for certain polyamide granules and powder antioxidants, resulting in a tariff reduction from 5% to free.
Key Provisions
The key provisions of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), are outlined in sections 269C, 269B, 269D, 269E, 269F, and 269P(3). Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO if the goods in question are not listed in section 269SJ of the Act, which enumerates goods that cannot be subject to a TCO. For the CEO to approve the application, it must meet the core criteria set out in section 269C, which essentially means that no substitutable goods were produced in Australia on the day the application was lodged. Sections 269B and 269D define "goods produced in Australia," "ordinary course of business," and "substitutable goods," respectively, which are crucial for determining the eligibility of a TCO. If the CEO determines that the application meets the core criteria, they are required under section 269P(3) to issue a written TCO that specifies the goods and the corresponding item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved include the requirement for applicants to ensure their goods meet the core criteria and for the CEO to conduct a thorough assessment before approving or denying a TCO application. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the TCO, as stipulated in section 269K(1). The applicant must provide sufficient information to demonstrate that the goods do not have substitutable alternatives produced in Australia. The CEO must review all submissions and decide whether to proceed with the TCO based on the evidence provided.
Failure to comply with the provisions of the Act or breaching the terms of a TCO can lead to various consequences. The specific nature of the penalties or liabilities depends on the context of the breach. However, the Act does not impose liabilities on individuals or entities for actions taken before the TCO was registered, ensuring that existing rights are not adversely affected. If an individual or entity violates the terms of a TCO, they could potentially face civil or criminal penalties, though the Act does not detail specific penalties within the explanatory statement. Importers, however, may apply for a refund of duties paid on goods imported since the TCO was deemed to have come into force, as per Regulation 126(1)(r).