EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509831
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 Homopolymer Resin Polypropylene on 27 July 2005.
Instrument
TCO No 0509831 was made on 21 October 2005. It declares that those certain Homopolymer Resin Polypropylene 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. 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. 0509831 is taken to have come into force on 27 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. 0509831, enacted in 2005 under the Customs Act 1901, was introduced to provide a mechanism through which businesses could apply for tariff concessions on certain imported goods. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions, effectively lowering the customs duty on specified goods if certain criteria are met. The primary objective of this legislation is to support Australian industries by making imported goods more competitive, thereby potentially stimulating local production and reducing costs for businesses that rely on these goods. The instrument was made in response to an application by VisyPak Operations Pty Ltd for tariff concessions on Homopolymer Resin Polypropylene, which resulted in a duty reduction from 5% to 0%. The process involved public consultation, although no objections were received, and the concessions took effect from the date the application was lodged.
Scope and Application
The Customs Act 1901, specifically through Part XVA, authorises the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on certain goods. This legislation applies to any person or entity that applies for a TCO under section 269F of the Act, with the condition that the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. A TCO application is considered valid if it meets the core criteria stipulated in section 269C of the Act, namely that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E of the Act. The geographic reach of this legislation is national, as it operates under the framework of Commonwealth law. Notably, TCO No. 0509831, made on 21 October 2005, pertains to certain Homopolymer Resin Polypropylene, reducing their duty rate from 5% to 0% due to the absence of substitutable goods produced in Australia. This instrument does not impose any new liabilities and protects the rights of existing parties as of the date of registration.
Key Provisions
The Tariff Concession Instrument No. 0509831 under the Customs Act 1901 (section 269F) provides for a concession on the customs duty applicable to certain Homopolymer Resin Polypropylene goods. Under this instrument, the general duty rate of 5% is reduced to 0% for these goods, effective from 27 July 2005, the date on which the application for the tariff concession was lodged (subsection 269S(1)). The decision to grant the concession was made by the Chief Executive Officer of Customs (the CEO) after satisfying the core criteria as outlined in section 269C of the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This decision is documented in the written order (section 269P(3)).
The Act imposes specific obligations on parties applying for a Tariff Concession Order (TCO). An applicant must ensure that the goods in question are not those specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO is required to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who might have reasons to oppose the concession. While VisyPak Operations Pty Ltd’s application did not receive any submissions, the process ensures transparency and allows for potential objections to be raised. The CEO must also adhere to the criteria specified in sections 269D and 269E, particularly concerning the definition of ‘goods produced in Australia’ and ‘ordinary course of business’.
Any failure to comply with the conditions set out in the Customs Act 1901 regarding the application and granting of a TCO could result in various civil or criminal consequences. Although the specific penalties are not detailed in the explanatory statement, breaches of the Act can generally lead to penalties as stipulated in the legislation. These may include fines or imprisonment, depending on the nature and severity of the breach. The Act ensures that the concession does not affect any existing rights or liabilities of persons other than the Commonwealth, safeguarding against any retroactive disadvantages or liabilities (subsection 269S(1)).