EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507364
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.
Tape Pacific Pty Ltd applied for a TCO in respect of certain polypropylene self adhesive tape on 16 June 2005.
Instrument
TCO No 0507364 was made on 2 September 2005. It declares that those certain polypropylene self adhesive tapes 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. 0507364 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0507364, enacted in 2005, is an instrument made under the Customs Act 1901, which governs the scheme for Tariff Concession Orders (TCOs). This instrument was introduced to address the specific needs of businesses seeking to import goods under more favourable tariff conditions. The Customs Act 1901 provides for the CEO to grant TCOs that allow for reduced customs duty rates on certain goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. In this case, Tape Pacific Pty Ltd applied for a TCO on certain polypropylene self-adhesive tapes, which was subsequently granted by the CEO on 2 September 2005. The objective of the TCO was to ensure that these specific goods would benefit from a lower duty rate, thereby enhancing their economic viability in the Australian market. The instrument was designed to ensure that the rights of existing importers are protected, and no new liabilities are imposed on any party.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation and application of Tariff Concession Orders (TCOs) which provide lower rates of customs duty on certain goods. This Act applies to any person or entity seeking a tariff concession for goods not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The Act’s jurisdictional reach is national, as it applies throughout Australia and is administered by the Chief Executive Officer of Customs. The process involves an application to the CEO, who must ensure that the application meets the core criteria, primarily that no substitutable goods are produced in Australia. If the application is deemed valid, the CEO issues a written order, which in this case, was TCO No. 0507364, applicable to certain polypropylene self-adhesive tapes. The TCO came into force on the date of the application, 16 June 2005, and does not retroactively affect the rights of any person other than the Commonwealth, nor does it impose any new liabilities. This legislative framework is further refined through subordinate instruments, ensuring comprehensive regulation of tariff concessions.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (section 269F). When a TCO is granted, it applies a lower rate of customs duty to the specified goods. For example, in this case, certain polypropylene self-adhesive tapes will be subject to a duty rate of free instead of the general rate of 5% (section 269P(3)). The process begins with an application to the CEO, who must then determine if the application meets the core criteria as outlined in section 269C of the Act.
The obligations under the Act require that the CEO ensures that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Additionally, the CEO must verify that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). If these criteria are met, the CEO must issue a written TCO order specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995. In this instance, item 50 of Schedule 4 applies to the specified polypropylene self-adhesive tapes (section 269P(3)).
The Customs Act 1901 does not explicitly state offences, penalties, or consequences for breaches of the TCO provisions. However, any misuse or improper application of the TCO could potentially lead to civil or criminal consequences under other sections of the Customs Act or related legislation. For instance, if an entity falsely claims eligibility for a TCO, it could face legal action for misrepresentation or fraud, with penalties varying depending on the severity of the breach.
Compliance with the TCO also includes adhering to the notice and publication requirements. The CEO must publish a notice in the Gazette inviting any interested party to lodge a submission if they believe the TCO should not be made (subsection 269K(1)). In this case, no submissions were received, allowing the TCO to proceed without opposition. It is important to note that the TCO does not affect any existing rights or impose new liabilities on any person other than the Commonwealth (subsection 269S(1)). This ensures that the TCO benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.