EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507517
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.
I.N.C. Corporation Pty Ltd applied for a TCO in respect of certain extruded polyethylene coated paper on 20 June 2005.
Instrument
TCO No 0507517 was made on 16 September 2005. It declares that the certain extruded polyethylene coated paper is a product 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. 0507517 is taken to have come into force on 20 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, enacted by the Parliament of Australia, addresses the need for a structured scheme to provide tariff concessions on certain goods, ensuring that importers are not unduly burdened with high customs duties. This scheme is particularly aimed at fostering economic efficiency by allowing for lower rates of customs duty on goods for which there are no domestic alternatives. The act empowers the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet specific criteria, such as not having substitutable goods produced in Australia. The 2005 instrument, TCO No. 0507517, exemplifies this process by providing a zero duty rate for certain extruded polyethylene coated paper, effective from the date of application, 20 June 2005. The objective is to ensure that importers can benefit from reduced tariffs, promoting both economic activity and competitive pricing in the market.
Scope and Application
The Tariff Concession Instrument No. 0507517, under the Customs Act 1901, applies to the concession of customs duty rates for specific goods, in this case, certain extruded polyethylene coated paper. The Act applies to any person or entity seeking to import the specified goods and the Australian Customs Service in its role of assessing and granting tariff concessions. This legislation operates within the Commonwealth jurisdiction, impacting the national customs duty framework. The Act excludes goods specified under section 269SJ, which cannot be subject to a Tariff Concession Order (TCO). The Act’s application may be extended or restricted through subordinate instruments, such as regulations, which can provide further detail on the conditions and procedures for TCO applications. The commencement of the TCO is deemed to be from the date of the application, and it does not affect the rights of any person as at the date of registration, ensuring that no person other than the Commonwealth is disadvantaged or subjected to liabilities for actions prior to the registration of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Order (TCO) No. 0507517, which was made under section 269F of the Customs Act 1901, declare that certain extruded polyethylene coated paper is subject to the tariff concession and is to be treated as a product to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). This means that the general rate of duty on these goods, which is 5%, is reduced to free when the TCO is in effect. The TCO came into force on the same day the application was lodged, 20 June 2005 (subsection 269S(1)).
The Customs Act 1901 imposes specific obligations on the Chief Executive Officer of Customs (CEO) when processing an application for a TCO. Firstly, the CEO must ensure that the application is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO (section 269F). Secondly, the CEO must verify that the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Substitutable goods, as defined in section 269D, are goods produced in Australia that could serve the same use as the goods in question. If the CEO is satisfied with these criteria, they must make a written TCO order (subsection 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties regarding the application and to consider any such submissions before making a final decision (subsection 269K(1)).
In the case of TCO No. 0507517, the CEO was satisfied that the application met the core criteria, as no substitutable goods were produced in Australia, and no submissions were received in response to the Gazette notice. The order was therefore made on 16 September 2005, declaring the goods to be free of duty. The TCO does not affect any existing rights or liabilities of individuals or entities other than the Commonwealth, and it provides a benefit to importers who can apply for a refund of duty on goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
There are no specific offences or penalties mentioned in the explanatory statement for breaches related to the TCO. However, under the general provisions of the Customs Act 1901, any fraudulent or improper conduct related to the application or operation of a TCO could potentially lead to civil or criminal penalties. The maximum penalties for such offences would depend on the specific nature of the breach and could include fines or imprisonment, as outlined in the relevant sections of the Customs Act and any associated regulations.