EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509439
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 on 15 July 2005.
Instrument
TCO No 0509439 was made on 12 January 2006. It declares that those certain 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 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. 0509439 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 Tariff Concession Instrument No. 0509439 was enacted in 2006 under the Customs Act 1901. This instrument aims to address the issue of applying tariff concessions to specific goods, ensuring that lower rates of customs duty apply to goods subject to a Tariff Concession Order (TCO). The Tariff Concession Orders are made by the Chief Executive Officer of Customs, following applications that meet the core criteria as outlined in the Act. This particular instrument was introduced to facilitate tariff concessions for certain Polyethylene Terephthalate, with the general rate of duty being reduced from 5% to free, thereby benefiting the rights of importers who can apply for a refund of duty on goods imported since the effective date of the TCO. The process involves consultation with relevant parties and ensures that the rights of non-Commonwealth persons are not adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0509439 applies to the goods specified in the application made by VisyPak Operations Pty Ltd on 15 July 2005, concerning certain Polyethylene Terephthalate. The Act, Customs Act 1901, provides a framework under which the Chief Executive Officer of Customs (CEO) can make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty on certain goods. This applies specifically to those goods that are not listed in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO, and where no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The instrument was made on 12 January 2006, and it declares that certain Polyethylene Terephthalate are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%. The instrument affects the rights of importers beneficially, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The instrument has a national jurisdictional reach as it is an instrument under the Commonwealth Customs Act 1901. There are no exclusions or exemptions specified within this particular TCO, and it does not disadvantage or impose any liabilities on any person other than the Commonwealth in respect of anything done or omitted before the date of registration.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0509439 under the Customs Act 1901 (section 269F) allow for the application of a lower rate of customs duty on certain goods, in this case, certain Polyethylene Terephthalate. The instrument specifies that these goods will be subject to a rate of duty of free, instead of the general rate of 5% (section 269P(3)). To qualify for this concession, the goods must not have substitutable goods produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B respectively.
The Customs Act 1901 imposes certain obligations on the parties involved. The Chief Executive Officer of Customs (CEO) is required to assess whether an application for a Tariff Concession Order (TCO) meets the core criteria, specifically that no substitutable goods are produced in Australia (section 269C). If the CEO determines that the application meets the criteria, they must make a written order declaring the goods to which the TCO applies (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as soon as practicable after accepting the application as valid (subsection 269K(1)). In this instance, an objection was received from Leading Synthetics Pty Ltd.
The Act also outlines the consequences for breaches of its provisions. While the explanatory statement does not detail specific penalties for non-compliance with the TCO, breaches of the Customs Act 1901 can lead to various civil and criminal consequences. Generally, penalties for breaches of the Customs Act can include fines and imprisonment, with the exact penalties depending on the nature and severity of the offence. For example, under section 158, wilfully making a false statement or representation in a Customs document can result in a penalty of up to five times the duty evaded, or imprisonment for up to five years, or both. Importers can also apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations, without incurring any liabilities.