EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609980
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.
Olex Australia Pty Ltd applied for a TCO in respect of certain polyester tape on 5 June 2006.
Instrument
TCO No 0609980 was made on 25 August 2006. It declares that those certain polyester tape 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. 0609980 is taken to have come into force on 5 June 2006.
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 to facilitate the regulation of customs and excise within Australia. The Act was introduced to address the need for streamlined processes in the importation and exportation of goods, ensuring that customs duties and taxes are appropriately levied and collected. The problem it aimed to resolve includes the regulation of imported and exported goods, ensuring fair trade practices, and providing for the effective collection of duties and taxes. The Tariff Concession Instrument No. 0609980, enacted in 2006, was created under the authority of the Customs Act 1901 by the Chief Executive Officer of Customs. The policy objective of this specific instrument was to provide a tariff concession for certain polyester tape, thereby reducing the customs duty from the general rate of 5% to 0% for these goods. This was achieved by declaring that the specified goods were subject to a prescribed item in the Customs Tariff Act 1995, thus benefiting importers by potentially reducing their duty liabilities.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions for specific goods, allowing for a lower rate of customs duty to be applied as per a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs. This legislation specifically addresses applications for tariff concessions where no substitutable goods are produced in Australia, as outlined in section 269F of the Act. Once an application meets the core criteria set out in sections 269C and 269SJ of the Act, the CEO must issue a TCO. The Act's application extends to the national level within Australia, with the TCO's commencement date being the day the application was lodged. Notably, the TCO does not affect existing rights or impose new liabilities on persons other than the Commonwealth, but it does benefit importers by potentially allowing them to apply for duty refunds on goods imported since the TCO's effective date. Any exclusions or specific conditions are determined by the Act and can be further refined through subordinate instruments.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0609980 (F2006L03025) concern the application and establishment of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows individuals or entities to apply to the Chief Executive Officer (CEO) of Customs for a TCO if the goods in question are not specified in section 269SJ. If the application does not pertain to goods that are exempt from a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. This involves determining if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269P(3). If the CEO is satisfied that the application meets these criteria, they must issue a written TCO, declaring the goods to which a specific tariff item applies, as per section 269P(3). In this case, TCO No. 0609980 was issued for certain polyester tape, applying item 50 of Schedule 4 to the Customs Tariff Act 1995, which sets the duty rate at 0%.
The Act imposes several obligations on the parties involved. The CEO of Customs must ensure that any TCO application that is not disqualified under section 269SJ is thoroughly reviewed against the core criteria in section 269C. This involves confirming that no substitutable goods were produced in Australia on the day the application was made, following the definitions in sections 269D, 269E, and 269F. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made, in accordance with subsection 269K(1). If no submissions are received, the CEO proceeds to make the TCO.
The Act also outlines the consequences for non-compliance or breach of the provisions. While specific offences and penalties are not detailed in this particular instrument, general provisions under the Customs Act 1901 and related regulations may apply. Typically, breaches of customs regulations can lead to civil or criminal penalties, depending on the severity and intent of the breach. Civil penalties can include fines, while criminal penalties can result in imprisonment. The exact penalties would be determined by the specific nature of the breach and relevant sections of the Act and associated regulations. In this context, the TCO itself does not impose any liabilities on any person, as it is designed to benefit importers by reducing the duty on the specified goods.