EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509999
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.
Techni-Chem Australia Pty Ltd applied for a TCO in respect of certain Polyvinyl Chloride Film on 29 July 2005.
Instrument
TCO No 0509999 was made on 21 October 2005. It declares that those certain Polyvinyl Chloride Film 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. 0509999 is taken to have come into force on 29 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, includes a scheme under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on specified goods. This legislative framework was introduced to address the need for tariff reductions on goods that are not produced domestically and thus cannot be substituted with locally made alternatives. The explanatory statement for Tariff Concession Instrument No. 0509999, issued on 21 October 2005, outlines the process by which Techni-Chem Australia Pty Ltd successfully applied for a TCO for certain Polyvinyl Chloride Film, resulting in a reduction of the duty rate from 5% to 0%. The policy objective of this concession is to support the importation of goods that are not domestically produced, thereby potentially lowering costs for businesses and consumers while encouraging trade and economic activity.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the process through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals and entities seeking to import goods that may qualify for reduced customs duty under a TCO. The scope of the Act is national, as it is a Commonwealth Act. The application of the Act is limited to goods that do not have substitutable equivalents produced in Australia, as specified under sections 269SJ, 269C, 269B, and 269D. The CEO must be satisfied that no such substitutable goods are produced in Australia for the application to meet the core criteria for a TCO. The Act allows for its application to be extended or restricted through subordinate instruments, such as regulations, which provide further detail on the procedures and conditions for TCO applications. Once a TCO is made, it is effective from the date the application was lodged, providing benefits such as duty refunds for importers of the specified goods. The CEO is also required to consult with the public, inviting submissions on the proposed TCO, although in this case, no submissions were received.
Key Provisions
The Tariff Concession Instrument No. 0509999 under the Customs Act 1901 (sections 269C, 269F, 269P) provides that a lower rate of customs duty applies to certain Polyvinyl Chloride Film. Specifically, section 269F allows an application for a Tariff Concession Order (TCO) to be made to the Chief Executive Officer of Customs (CEO). If the CEO determines that the application meets the core criteria, a TCO can be issued, as outlined in section 269P(3). In this case, the CEO was satisfied that no substitutable goods were produced in Australia, thus the application was approved, and the TCO was issued on 21 October 2005. This TCO applies item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty rate from 5% to 0%.
The obligations imposed by this Act on the relevant parties include the requirement for the CEO to assess applications for TCOs against the core criteria (section 269C). The CEO must also ensure that the application does not pertain to goods specified in section 269SJ of the Act, which are ineligible for TCOs. Additionally, once an application is accepted as valid, the CEO is mandated to publish a notice in the Gazette, inviting any interested parties to submit objections or reasons why the TCO should not be issued (subsection 269K(1)). In this instance, no submissions were received.
The Act further stipulates that a TCO comes into force on the day the application is lodged (subsection 269S(1)). In the context of TCO No. 0509999, this means it came into effect on 29 July 2005. The TCO does not retroactively affect the rights of any person or impose new liabilities for actions taken before its issuance. However, it does confer benefits on importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
Failure to comply with the provisions of the Customs Act 1901 or the associated regulations may result in various consequences. The Act does not specify particular offences or penalties within this explanatory statement, but breaches of customs regulations generally may lead to civil or criminal penalties, including fines and imprisonment. The exact penalties depend on the specific breach and are outlined in other sections of the Customs Act 1901 and related legislation.