EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1137019
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.
Actech Pty Ltd applied for a TCO in respect of certain concrete surface retarder solutions on 07 November 2011.
Instrument
TCO No 1137019 was made on 30 January 2012. It declares that those certain concrete surface retarder solutions 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. 1137019 is taken to have come into force on 07 November 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 regulation of customs and excise duties, including the creation of Tariff Concession Orders (TCOs) which reduce customs duty on specified goods. TCOs are intended to address economic and competitive issues by allowing for reduced tariff rates on goods that are not produced in Australia, thereby facilitating trade and potentially lowering consumer costs. The Act empowers the Chief Executive Officer of Customs to make these orders, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 1137019, made under this Act, addresses a specific application by Artech Pty Ltd for concessional tariff treatment on certain concrete surface retarder solutions, recognising the lack of Australian-produced substitutes and thereby applying a zero-rate duty on these goods. This legislative mechanism aims to support industries by making imported goods more competitively priced without disadvantaging existing rights or imposing new liabilities on individuals.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods into Australia, provided that the goods are not specified as ineligible in section 269SJ of the Act. A TCO may be applied for by any person and, if the application meets the core criteria outlined in section 269C of the Act, the CEO must make a written order declaring the goods to which the concession applies. The instrument applies to goods for which no substitutable goods are produced in Australia in the ordinary course of business. For instance, Actech Pty Ltd applied for and received a TCO for certain concrete surface retarder solutions, which were declared to be subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The TCO has a national jurisdictional reach, applying across Australia. The application process requires public notification, allowing interested parties to submit objections if they consider the TCO should not proceed, although no objections were raised for TCO No. 1137019. The TCO's commencement date aligns with the date of application, ensuring that it does not disadvantage any person in respect of actions taken prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 1137019, made under the Customs Act 1901, pertains to a Tariff Concession Order (TCO) concerning certain concrete surface retarder solutions. The main operative sections of this legislation include sections 269F, 269C, and 269P(3) of the Customs Act. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria, specified in section 269C, they must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, the CEO was satisfied that the application for the concrete surface retarder solutions met the core criteria and subsequently issued TCO No. 1137019.
The obligations imposed by the Act on the parties governed by this legislation include the requirement for the CEO to evaluate TCO applications and ensure they meet the core criteria. This involves verifying that no substitutable goods are produced in Australia on the day the application was lodged. The Act also mandates that the CEO publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. In this instance, the CEO published a notice in the Gazette but did not receive any submissions.
Under the Customs Act 1901, the CEO is tasked with ensuring that the TCO does not disadvantage any person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration. In the context of TCO No. 1137019, the CEO confirmed that the order does not affect the rights of any person other than the Commonwealth and does not impose any liabilities. The rights of importers are beneficially affected, as they can apply for a refund of duty on goods imported since the TCO is taken to have come into force. The general rate of duty on these goods is reduced from 5% to free under the TCO.
For any breach of the provisions under the Customs Act 1901, there are potential civil or criminal consequences. However, the specific offences, penalties, or consequences for breach are not detailed in the Explanatory Statement. The legislation primarily focuses on the process and criteria for making a TCO and the implications for the goods subject to such an order. The Act ensures that the TCO process is transparent and that any affected parties have an opportunity to provide input, thereby maintaining fairness and compliance with the legal framework.