EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1131383
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.
Armacell Australia Pty Ltd applied for a TCO in respect of certain compounded rubber sheets on 13 September 2011.
Instrument
TCO No 1131383 was made on 06 December 2011. It declares that those certain compounded rubber sheets 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. 1131383 is taken to have come into force on 13 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 Australian Parliament, provides a framework for the administration of customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs) as a means to reduce customs duties on certain goods. The Act was introduced to address the need for flexibility in the customs duty regime to support economic growth and competitiveness, particularly for industries that rely on imported goods. The Tariff Concession Instrument No. 1131383, made on 6 December 2011, grants a tariff concession for certain compounded rubber sheets, effectively reducing the customs duty rate from 5% to free, in recognition that no substitutable goods were produced in Australia. This order was made following an application by Armacell Australia Pty Ltd, and after considering submissions from interested parties, none of which opposed the concession. The policy objective of this instrument is to facilitate the importation of goods that are essential for certain industries without imposing a financial burden, thereby supporting the economic activities reliant on these imported goods.
Scope and Application
The Tariff Concession Instrument No. 1131383, made under the Customs Act 1901, applies to the specific goods—certain compounded rubber sheets—for which Armacell Australia Pty Ltd applied. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to goods that meet specific criteria. This particular TCO applies to the goods specified in the application and is effective from the date the application was lodged, 13 September 2011. The instrument grants a tariff concession by setting the duty rate for these compounded rubber sheets to free, as opposed to the general rate of 5%. The application of the TCO does not adversely affect any pre-existing rights of individuals or entities other than the Commonwealth and does not impose any new liabilities. The TCO is intended to benefit importers who can apply for refunds of duty paid on these goods imported since the effective date of the TCO.
Key Provisions
The primary sections relevant to Tariff Concession Orders (TCOs) under the Customs Act 1901 include section 269F, which allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. Section 269C outlines the core criteria that must be satisfied for an application to be considered, particularly that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B clarifies terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the CEO determines that the application meets these criteria, they must issue a written order under section 269P(3), declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
Entities such as Armacell Australia Pty Ltd must ensure their TCO applications meet the core criteria set out in the Act. This involves demonstrating that the goods in question are not substitutable by any goods produced in Australia. Once the CEO accepts the application as valid, the CEO must publish a notice in the Gazette under section 269K(1) inviting any interested parties to submit objections. In the case of TCO No 1131383, no submissions were received. The TCO comes into force on the day the application is lodged, as stated in subsection 269S(1). The rights of importers are protected under paragraph 126(1)(r) of the Regulations, allowing them to apply for a refund of duty on goods imported since the TCO's effective date.
Failing to comply with the requirements for a TCO application may result in the CEO denying the application. Under the Customs Act, there are no specific criminal penalties for non-compliance with TCO provisions; however, any misuse of a TCO could lead to general penalties for fraud or misrepresentation. The focus is on ensuring applications are valid and meet the criteria to prevent unfair trade practices and to protect the interests of Australian producers.