EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509438
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.
VisyPak Operations Pty Ltd applied for a TCO in respect of certain Polyethylene Terephthalate Copolymer on 15 July 2005.
Instrument
TCO No 0509438 was made on 13 January 2006. It declares that those certain Polyethylene Terephthalate Copolymer 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. One submission objecting to the TCO application was received from Leading Synthetics Pty Ltd.
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. 0509438 is taken to have come into force on 15 July 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 Commonwealth Parliament, establishes a framework for the regulation of imports and exports, including the imposition of customs duty. The Tariff Concession Instrument No. 0509438, made under the Act in 2006, was introduced to provide a solution to the problem of applying lower rates of customs duty on specific goods through Tariff Concession Orders (TCOs). This instrument addresses the gap in the tariff system by allowing the Chief Executive Officer of Customs to make TCOs, which exempt certain goods from the standard duty rates, provided that no substitutable goods are produced in Australia. This concession aims to benefit importers by potentially reducing the duty costs associated with importing these specified goods. The process involves applications being assessed against core criteria, with public consultation being an integral part of the decision-making process.
Scope and Application
The Tariff Concession Instrument No. 0509438, which is enacted under the Customs Act 1901, applies specifically to goods for which a Tariff Concession Order (TCO) has been sought and granted. This Act pertains to the application submitted by a person or entity, in this case VisyPak Operations Pty Ltd, for a concession on customs duty rates for specified goods. The application is evaluated by the Chief Executive Officer of Customs to determine if the goods qualify for a TCO based on whether substitutable goods are produced in Australia. The geographic reach of this Act is national, as it operates under the framework of the Commonwealth of Australia, and the instrument itself applies to goods imported into Australia. Notably, the Act excludes certain goods from being eligible for a TCO, as outlined in section 269SJ of the Act. The Instrument No. 0509438 was made effective from the date the application was lodged, 15 July 2005, and it specifies that certain Polyethylene Terephthalate Copolymer will have a free rate of duty instead of the general 5% rate, with no retroactive impact on existing transactions or liabilities.
Key Provisions
The primary operative sections of this legislation focus on the process and criteria for making Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). According to section 269F, any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO then assesses whether the application meets the core criteria specified in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined in section 269D and refer to goods produced in Australia that can be put to a use corresponding to that of the goods the subject of the TCO application. If the CEO is satisfied that the application meets these criteria, they are required to make a written order (section 269P(3)) declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved in the TCO process. For instance, under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice invites any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. This ensures that all stakeholders have an opportunity to be heard before a TCO is made. Additionally, section 269S(1) states that a TCO is deemed to come into force on the day the application for the TCO was lodged. This means that the rights of importers are beneficially affected from the date of the application, and they can apply for a refund of duty on goods imported since that date under paragraph 126(1)(r) of the Regulations.
The legislation also sets out specific consequences and penalties for breaches. While the Act does not explicitly detail civil or criminal penalties for non-compliance with the TCO provisions, breaches of the Customs Act 1901 generally can result in significant penalties. For example, under section 243D of the Act, a person who contravenes the Act can be liable to a penalty of up to 10,000 penalty units or imprisonment for five years, or both, for an offence involving serious criminal conduct. Additionally, section 243DA outlines that a person can be liable to a penalty of up to 1,000 penalty units or imprisonment for six months, or both, for an offence involving less serious criminal conduct. The maximum penalties underscore the seriousness with which the Act treats non-compliance, ensuring that the integrity of the tariff concession process is maintained.