EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052006
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.
Remco Australia Pty Ltd applied for a TCO in respect of certain polycarbonate sheets and or panels on 25 November 2010.
Instrument
TCO No 1052006 was made on 28 February 2011. It declares that those certain polycarbonate sheets and or panels 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. 1052006 is taken to have come into force on 25 November 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 by the Parliament of Australia to provide a comprehensive framework for the administration of customs duties and related regulations. Part XVA of the Act, in particular, outlines the mechanism through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative framework was introduced to address the need for flexibility in tariff application, particularly when it comes to imported goods that have no local substitutes. The aim is to facilitate trade by providing tariff concessions under certain conditions, thereby supporting economic activities by lowering customs duties on specific goods. In this context, Tariff Concession Instrument No. 1052006 was developed to respond to an application by Remco Australia Pty Ltd for tariff concessions on certain polycarbonate sheets and panels, recognising that no substitutable goods were being produced in Australia at the time of application. This instrument effectively grants a tariff concession, setting the duty rate at free, which was taken to have come into effect from the date the application was lodged, 25 November 2010.
Scope and Application
The Customs Act 1901, through Part XVA, allows the Chief Executive Officer of Customs to create Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to specific goods. This legislation is applicable to any person or entity seeking to import goods that are not already being produced in Australia in the ordinary course of business, as per the core criteria outlined in section 269C. The application process requires the applicant to demonstrate that no substitutable goods are being produced domestically, as defined by sections 269D and 269E. Once the application meets the criteria, a TCO is issued, providing tariff concessions to the specified goods. The scope of this Act extends across the Commonwealth, affecting importers who can benefit from reduced duty rates or seek refunds for duties paid prior to the TCO's effective date. However, the Act does not apply to goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The Act also mandates that the CEO must publish a notice in the Gazette, inviting public submissions, although in the case of TCO No. 1052006, no submissions were received. This TCO, effective from the date of application, does not disadvantage any person or impose new liabilities on anyone.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1052006 under the Customs Act 1901 pertain to the creation and application of Tariff Concession Orders (TCOs). Specifically, section 269C outlines the core criteria that must be met for a TCO to be considered, while section 269P(3) details the process whereby the Chief Executive Officer (CEO) of Customs must issue a written TCO if the application meets these criteria (sections 269C and 269P(3)). Section 269F permits individuals or entities to apply for a TCO in respect of goods, provided those goods are not specified in section 269SJ, which lists items that cannot be subject to a TCO. TCO No. 1052006, made under these provisions, applies to certain polycarbonate sheets and panels, granting them a concessional rate of duty of zero percent instead of the standard 5 percent.
The Act imposes several obligations and requirements on the parties involved. For instance, section 269K(1) mandates that the CEO publish a notice in the Gazette inviting submissions from any interested parties regarding the TCO application. This ensures transparency and allows for public input before the TCO is finalised. Additionally, section 269S(1) specifies that a TCO comes into force on the day the application is lodged, ensuring that the concessional rates are effective from the onset of the application process. The CEO is also required to ensure that no substitutable goods are produced in Australia at the time of application, as outlined in section 269C.
Any breach of the provisions under this Act could lead to serious consequences. Although the Explanatory Statement does not detail specific offences or penalties, it is implied that non-compliance with the tariff concession scheme could result in legal action. Typically, under the Customs Act 1901, penalties for non-compliance might include fines or imprisonment, depending on the severity and intent behind the breach. For instance, section 238 of the Customs Act provides for penalties including fines of up to $22,000 or imprisonment for up to two years, or both, for offences such as providing false information in an application or contravening the Act. These provisions are designed to ensure the integrity and fairness of the tariff concession scheme.