EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705916
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.
Nylex Industrial Products applied for a TCO in respect of certain polyethylene on 20 April 2007.
Instrument
TCO No 0705916 was made on 7 August 2007. It declares that those certain polyethylene 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. 0705916 is taken to have come into force on 20 April 2007.
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, introduced the scheme allowing for Tariff Concession Orders (TCOs) to provide relief from customs duty on specific goods, addressing the need for economic incentives and competitiveness in certain sectors. This Act enables the Chief Executive Officer of Customs to reduce or eliminate customs duty on goods if certain criteria are met, such as the absence of substitutable goods produced domestically. Tariff Concession Instrument No. 0705916, issued under this Act, specifically addresses an application by Nylex Industrial Products for a tariff concession on certain polyethylene, reducing the duty from 5% to 0%. The policy objective is to support industry sectors by making imported goods more competitive without disadvantaging existing rights or imposing new liabilities on parties other than the Commonwealth.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions on imported goods, particularly those who apply for Tariff Concession Orders (TCOs) under Part XVA of the Act. This legislation specifically governs the process through which a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO, which allows for a lower rate of customs duty on certain goods. The Act applies to the entire Commonwealth of Australia, with the CEO’s decisions on TCO applications impacting import duties across the nation. The scope of the Act extends to all goods except those specified in section 269SJ, which lists goods that cannot be subject to a TCO. Furthermore, the Act allows for the creation of subordinate instruments to clarify or expand on the application of TCOs. In the case of TCO No. 0705916, the Act facilitated the application by Nylex Industrial Products for tariff concessions on certain polyethylene, which was granted upon the CEO’s satisfaction that no substitutable goods were produced in Australia at the time of application.
Key Provisions
The main operative sections of the Customs Act 1901, specifically Part XVA, allow for the creation of Tariff Concession Orders (TCOs) (section 269F). An application for a TCO must be submitted to the Chief Executive Officer of Customs (CEO) (section 269F). The CEO must determine if the application meets the core criteria, which requires, among other things, that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the application satisfies these criteria, the CEO is obligated to issue a written order (TCO) (section 269P).
The Act imposes certain obligations on the CEO, including the requirement to publish a notice in the Gazette inviting submissions from interested parties regarding the TCO application (subsection 269K(1)). It also requires the CEO to consider any submissions received and decide whether to proceed with the TCO (subsection 269K(1)). For the applicant, the primary obligation is to ensure that the application accurately reflects the circumstances and meets the statutory criteria for a TCO.
In the event of non-compliance with the requirements set out in the Customs Act 1901 or the associated regulations, various offences and penalties may apply. The precise nature of these penalties is not detailed in the explanatory statement, but generally, breaches of customs legislation can lead to both civil and criminal consequences. Civil penalties can include fines, while criminal penalties can include imprisonment, depending on the severity of the breach and the discretion of the court. The maximum penalties are not specified in the explanatory statement but would be determined according to the particular sections of the Act that are contravened.