EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507317
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.
Gerrard Signode PtyLtd applied for a TCO in respect of certain copolymer polyethylene terephthalate on 15 June 2005.
Instrument
TCO No 0507317 was made on 16 September 2005. It declares that those certain copolymer polyethylene terephthalate 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 0%.
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. One submission objecting to the TCO application was received from Basell Australia Pty Ltd.
Further, subsection 269M(1) of the Act provides that if the CEO considers that, in relation to a particular TCO application, a person may have reason to oppose the making of the TCO to which the application relates, he or she may, by notice in writing, invite the person to lodge a written submission with the CEO. The CEO invited Marplex Australia Pty Ltd and Polypacific Pty Ltd to lodge a written submission.
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. 0507317 is taken to have come into force on 15 June 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 amended by the Tariff Concession Instrument No. 0507317, enacted in 2005, to address the need for tariff concessions on specific imported goods where no suitable Australian-made alternatives exist. This legislation allows the Chief Executive Officer of Customs to grant tariff concessions on imported goods, thereby reducing the customs duty on these items. The instrument was introduced to ensure that Australian businesses can compete fairly with imported products by providing a tariff relief mechanism where appropriate. The instrument aims to promote fair trade practices and protect domestic industries by preventing the imposition of tariffs on goods for which no domestic substitutes are produced. The instrument was enacted by the relevant federal authority, likely under the powers conferred to the executive by the Customs Act, and aims to facilitate smoother trade operations while protecting local industries where necessary.
Scope and Application
The Tariff Concession Instrument No. 0507317, under the Customs Act 1901, applies to goods specified in the instrument, which in this instance are certain copolymer polyethylene terephthalate. The Act allows for the Chief Executive Officer of Customs to issue a Tariff Concession Order (TCO) that reduces the customs duty on such goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This concession is granted to Gerrard Signode Pty Ltd, with the instrument declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduced duty rate from 5% to 0%. The Act's application extends across the Commonwealth of Australia and involves entities such as Gerrard Signode Pty Ltd that import or produce the specified goods. The Act mandates consultation with potentially affected parties, such as Basell Australia Pty Ltd, Marplex Australia Pty Ltd, and Polypacific Pty Ltd, before a TCO is issued, ensuring that all relevant submissions are considered. The TCO is effective from the date the application was lodged, without retroactive effect on pre-existing transactions or liabilities.
Key Provisions
The primary operative sections of the Customs Act 1901, as relevant to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S (subsection 269S(1)). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not involve goods specified in section 269SJ, which are ineligible for a TCO, the CEO must then determine if the application meets the core criteria specified in section 269C. This section requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order (TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specified rate of duty.
The Act imposes several obligations on the parties involved in the TCO process. The CEO has a responsibility to ensure that any TCO application is valid and meets the core criteria as outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette, inviting any person who might oppose the TCO to lodge a submission. If the CEO considers that a particular person may have reason to oppose the TCO, they may invite that person to lodge a written submission under section 269M(1). The obligations also include processing these submissions and making a decision based on the evidence and arguments presented.
There are no specific offences, penalties, or civil/criminal consequences detailed within the explanatory statement for breach of the provisions related to TCOs. However, it is implied that any failure to comply with the statutory requirements or procedural obligations may lead to legal challenges or administrative reviews. The consequences of non-compliance might include the invalidity of the TCO, potential financial repercussions for the parties involved, and legal disputes regarding the rights and liabilities of the affected parties. While the explanatory statement does not detail maximum penalties, breaches of the Customs Act 1901 in general may result in penalties that could include fines and imprisonment, depending on the nature and severity of the breach.