EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501795
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.
Kimberly-Clark Australia Pty Ltd applied for a TCO in respect of certain polyethylene film on 14 February 2005.
Instrument
TCO No 0501795 was made on 6 May 2005. It declares that those certain polyethylene films 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 3%.
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. 0501795 is taken to have come into force on 14 February 2005.
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 Australian Parliament to provide a framework for the administration of customs duties and regulations on the importation and exportation of goods. The Tariff Concession Instrument No. 0501795 was introduced to address the specific issue of granting tariff concessions for certain goods that were not being produced domestically, thereby providing a competitive edge for importing these goods. This instrument was created in response to an application by Kimberly-Clark Australia Pty Ltd for a Tariff Concession Order (TCO) concerning certain polyethylene films, where it was determined that no substitutable goods were being produced in Australia. As a result, the Chief Executive Officer of Customs made a written order declaring these specific polyethylene films as eligible for a reduced customs duty rate, thereby facilitating more cost-effective importation.
The policy objective behind this instrument is to ensure fair trade practices by preventing the domestic production of goods that are not viable within Australia, while also allowing for the importation of these goods at a reduced duty rate, thereby benefiting both importers and consumers. The instrument was published in the Gazette with an invitation for submissions, though none were received, and it came into effect on the date the application was lodged, 14 February 2005. Importantly, the TCO does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0501795, made under the Customs Act 1901, applies to the concession of customs duty rates on certain polyethylene films, specifically benefiting Kimberly-Clark Australia Pty Ltd. The Act applies to any entity or individual that imports the specified goods and seeks a tariff concession order (TCO) from the Chief Executive Officer of Customs. The TCO is effective from the date the application was lodged, 14 February 2005, and pertains to the reduced rate of customs duty on these goods from the general rate of 5% to a concessional rate of 3%. This concession is available nationally, encompassing the entire Commonwealth of Australia. The Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ, and requires that no substitutable goods are produced in Australia in the ordinary course of business, as per sections 269C and 269D. The CEO is mandated to publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. The TCO ensures that no pre-existing rights or liabilities of non-Commonwealth entities are adversely affected, while importers stand to gain from the reduced duty rates.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0501795 are sections 269C, 269B, 269D, 269E, and 269P. Section 269C specifies the core criteria that an application for a Tariff Concession Order (TCO) must meet. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269D elaborates on the meaning of "goods produced in Australia," while section 269E provides the meaning of "ordinary course of business." Section 269P(3) outlines the requirement for the Chief Executive Officer (CEO) of Customs to make a written TCO if the application meets the core criteria. This instrument was specifically enacted to address the application by Kimberly-Clark Australia Pty Ltd for a TCO concerning certain polyethylene films.
The Act imposes several obligations on the parties involved. Firstly, the CEO must ensure that the application for a TCO complies with the core criteria set out in section 269C. This involves confirming that no substitutable goods are produced in Australia in the ordinary course of business. Secondly, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as required by subsection 269K(1). Lastly, the CEO must make a written TCO if the application meets the core criteria, as stipulated in subsection 269P(3). These obligations ensure a transparent and fair process for the concession of customs duty rates.
Breaching the requirements of this Act can result in various consequences. While specific offences and penalties are not detailed within the explanatory statement, any failure to comply with the stipulated obligations could potentially lead to administrative penalties. The Act does not explicitly state maximum penalties for breaches; however, breaches of similar legislation often attract fines or other penalties as prescribed by the relevant laws. Furthermore, if the CEO fails to make a TCO when the application meets the core criteria, or if the CEO does not properly follow the consultation process, this could result in legal challenges or other administrative consequences.
Civil or criminal consequences for non-compliance with the Act can include penalties imposed by the relevant authorities. The exact nature and extent of these penalties would depend on the specific breach and the applicable laws. For instance, failure to adhere to the publication requirements for notices in the Gazette could result in administrative actions against the CEO. Additionally, if the TCO results in an improper concession of customs duties, it could lead to financial penalties or legal action against the affected parties. While the explanatory statement does not specify maximum penalties, it is clear that compliance with the Act is crucial to avoid adverse legal or financial repercussions.