EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617402
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.
Borgs Manufacturing Pty Ltd applied for a TCO in respect of certain polyvinyl chloride sheets and/or films on 19 September 2006.
Instrument
TCO No 0617402 was made on 08 December 2006. It declares that those certain polyvinyl chloride sheets and/or films 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. 0617402 is taken to have come into force on 19 September 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, enacted by the Australian Parliament, established a framework for the administration of customs and excise duties in Australia. Part XVA of the Act introduced a scheme under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs to provide reduced customs duty on certain imported goods. The Tariff Concession Instrument No. 0617402, which was enacted on 8 December 2006, addresses the problem of ensuring that tariff concessions are granted appropriately and transparently, and seeks to provide relief to businesses by lowering the duty on specified goods where no suitable Australian-produced substitutes exist. The policy objective is to facilitate the import of goods that are not produced in Australia while ensuring that the rights of importers are protected and that no existing liabilities are affected.
Scope and Application
The Tariff Concession Instrument No. 0617402, under the Customs Act 1901, pertains specifically to the application and administration of Tariff Concession Orders (TCOs) for certain polyvinyl chloride sheets and films. This legislation applies to the Chief Executive Officer of Customs, who has the authority to decide on applications for TCOs, and to entities like Borgs Manufacturing Pty Ltd, who can apply for such concessions. The instrument addresses the criteria for eligibility of goods for tariff concessions, which includes the absence of substitutable goods produced in Australia in the ordinary course of business, as defined in the Act. Geographically, the scope of this legislation is federal, as it is enacted under the Commonwealth of Australia. The instrument excludes goods specified in section 269SJ of the Act, which cannot be subject to a TCO, and does not impose any liabilities on any person, including the Commonwealth. This legislation extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods subject to the TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0617402 pertain to the application and approval of Tariff Concession Orders (TCOs) under the Customs Act 1901 (sections 269C, 269F, 269K, and 269S). Section 269F enables a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for specific goods. Once the CEO receives a TCO application, they must assess whether the application meets the core criteria outlined in section 269C, which include ensuring that no substitutable goods are produced in Australia at the time of the application. If these criteria are met, the CEO is required to issue a written order (section 269P(3)) that specifies the lower rate of customs duty applicable to the goods.
The obligations imposed by this Act on the relevant parties include the submission of a TCO application by an interested party and the CEO's duty to assess the application against the core criteria. The CEO must also publish a notice in the Gazette (section 269K(1)) inviting any person to lodge submissions if they believe there are reasons why the TCO should not be made. In this instance, Borgs Manufacturing Pty Ltd submitted an application for polyvinyl chloride sheets and/or films, and the CEO, finding the application met the core criteria, issued TCO No. 0617402.
Any breaches of the requirements under the Customs Act 1901 may result in civil or criminal penalties. While the specific penalties are not detailed in the explanatory statement, the Act generally provides for a range of penalties for breaches, including fines and imprisonment. The exact penalties would be determined by the courts based on the nature and severity of the breach.
In summary, the Tariff Concession Instrument No. 0617402 facilitates the application and approval process for TCOs, ensuring that the lower rate of customs duty is applied to specified goods. The CEO must rigorously assess applications against the core criteria and publish notices in the Gazette to allow for public submissions. Any breaches of the Act could result in significant penalties, although the specifics are not provided in this explanatory statement.