EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1130352
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.
Dulux Group Australia Pty Ltd applied for a TCO in respect of certain resins on 07 September 2011.
Instrument
TCO No 1130352 was made on 05 December 2011. It declares that those certain 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. 1130352 is taken to have come into force on 07 September 2011.
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 Parliament of Australia, was amended to introduce a scheme under which Tariff Concession Orders (TCOs) can be made, allowing for lower rates of customs duty on certain goods. This was established to provide relief to industries that cannot produce certain goods domestically, thus fostering economic efficiency and competitiveness. Tariff Concession Instrument No. 1130352 was introduced to address the specific need for reduced customs duty on certain resins, which were found not to have substitutable goods produced in Australia. The instrument, made on 5 December 2011, applies a free rate of duty on these resins, effectively from the date the application was lodged on 7 September 2011, thereby benefiting importers without imposing any new liabilities. The policy objective is to ensure that the application of TCOs is transparent and allows for public submissions to prevent any unfair advantages or disadvantages to parties involved.
Scope and Application
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs), which are used to reduce customs duty on certain goods. Under this Act, the Chief Executive Officer of Customs has the authority to make TCOs for goods that meet specific criteria, including the absence of substitutable goods produced in Australia in the ordinary course of business. This legislation applies to any person or entity that seeks to import goods eligible for tariff concessions and is concerned with transactions involving such imports. Geographically, the Act operates at the Commonwealth level, impacting trade across Australia and affecting all states and territories uniformly. However, the Act excludes certain goods from being subject to TCOs, as outlined in section 269SJ. The application of the Act can be further refined through subordinate instruments, although the primary legislation itself sets the foundational criteria for TCOs. Notably, the TCOs do not affect the rights of any person other than the Commonwealth regarding matters before the date of registration, and they impose no additional liabilities on individuals or entities.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for Tariff Concession Orders (TCOs) under section 269F, which allows the Chief Executive Officer of Customs (the CEO) to grant reduced customs duty rates on specified goods. Section 269C specifies the core criteria for a TCO application, which includes ensuring that no substitutable goods are produced in Australia on the day the application is lodged, as defined under sections 269D and 269E of the Act. If these criteria are met, the CEO must make a written order granting the concession, as mandated by subsection 269P(3).
Entities or individuals seeking a TCO must meet these core criteria, which involves demonstrating that there are no substitutable goods produced in Australia that could replace the imported goods. Section 269B further clarifies that "goods produced in Australia" and "ordinary course of business" are terms defined elsewhere in the Act. The CEO must also ensure that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received.
In the specific case of TCO No. 1130352, the CEO determined that the application met the core criteria, resulting in the concession being granted for certain resins, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. This means the general rate of duty, which is 5%, is reduced to free for these goods. The concession came into force on the day the application was lodged, 7 September 2011, as per subsection 269S(1) of the Act. Importantly, the TCO does not disadvantage any person or impose liabilities for actions taken before the TCO was registered, as stated in the explanatory statement.
Failure to comply with the requirements set out in the Act, including the provisions for TCO applications and the criteria for concessions, can result in various consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs legislation can generally lead to criminal charges, fines, or other civil and criminal penalties as outlined in the relevant sections of the Customs Act 1901. The maximum penalties for breaches can vary depending on the severity of the offence and are determined by other provisions within the Act and associated regulations.