EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512269
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.
Convertech Australia Pty Ltd applied for a TCO in respect of certain twistable polyester film on 21 September 2005.
Instrument
TCO No 0512269 was made on 16 December 2005. It declares that those certain twistable polyester 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 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. 0512269 is taken to have come into force on 21 September 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods within Australia. The Act establishes a framework for customs duties and provides the authority to create Tariff Concession Orders (TCOs) to offer reduced customs duties on specific goods, subject to certain criteria. The problem or gap this legislation addresses is the need for flexibility in customs duties to support economic interests, particularly for goods that are not produced domestically or where domestic production is not feasible. This allows for fairer trade practices by reducing the cost burden on importers and promoting competitive pricing in the market. Tariff Concession Instrument No. 0512269, made under the Customs Act 1901, was introduced to provide a tariff concession for certain twistable polyester film by the Chief Executive Officer of Customs. This specific instrument was enacted following an application by Convertech Australia Pty Ltd, aiming to ensure that these particular goods are subject to a zero rate of customs duty, provided no substitutable goods are produced in Australia. The policy objective is to facilitate the importation of these goods at a reduced duty rate, thereby enhancing market accessibility and supporting industries reliant on these materials.
Scope and Application
The Tariff Concession Instrument No. 0512269 under the Customs Act 1901 applies to specific goods, namely certain twistable polyester film, which are subject to a lower rate of customs duty as declared in the instrument. This concession is applicable to goods imported into Australia by entities or individuals who seek to benefit from the reduced duty rate. The Act operates on a Commonwealth level, affecting the importation of goods across Australia. The instrument was made following an application by Convertech Australia Pty Ltd and became effective on 21 September 2005, the date the application was lodged. The application process involves scrutiny to ensure that no substitutable goods are produced in Australia, thereby meeting the core criteria as outlined in section 269C of the Act. Notably, this TCO does not disadvantage any existing rights of individuals or entities nor impose any new liabilities on them, ensuring that it only positively impacts those who import the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901, as related to Tariff Concession Orders (TCOs), particularly TCO No. 0512269, involve several key provisions. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO is satisfied that the application is not for goods specified in section 269SJ, they must decide if the application meets the core criteria, as outlined in section 269C. This decision hinges on whether there were any substitutable goods produced in Australia at the time the application was lodged, a concept further defined in sections 269D, 269E, and 269F. Should the CEO determine that the application meets these criteria, they are required to issue a written order, as per subsection 269P(3), specifying the tariff item under the Customs Tariff Act 1995 that applies to the goods in question.
The Act imposes several obligations on the parties involved. The CEO of Customs must ensure that any TCO application is valid and not for goods that are explicitly excluded under section 269SJ. Upon accepting a valid application, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as required by subsection 269K(1). If no submissions are received, the CEO proceeds to make the TCO. Additionally, the TCO must be registered, and the rights of importers are protected such that they are not disadvantaged by the order. Importers are entitled to apply for a refund of duty on goods imported since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations.
Any breaches or non-compliance with the provisions of the Customs Act 1901 and the associated regulations can lead to serious consequences. Although the specific penalties for breaches are not detailed in the explanatory statement, they may include fines and other civil or criminal penalties under the general provisions of the Act. The precise penalties would depend on the nature and severity of the breach, but they are intended to ensure compliance and enforce the regulatory framework governing customs and tariffs.