EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0706158
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.
BASF Australia Ltd applied for a TCO in respect of certain polybutylene terephthalate and polyethylene terephthalate alloy granules on 27 April 2007.
Instrument
TCO No 0706158 was made on 13 July 2007. It declares that those certain polybutylene terephthalate and polyethylene terephthalate alloy granules 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. 0706158 is taken to have come into force on 27 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 Tariff Concession Instrument No. 0706158 was enacted in 2007 under the Customs Act 1901 to provide tariff concessions for certain polybutylene terephthalate and polyethylene terephthalate alloy granules. This legislative instrument was introduced to address the need for reducing customs duties on specific imported goods, thereby making them more affordable and competitive in the Australian market. The instrument was created by the Chief Executive Officer of Customs (CEO), in accordance with section 269F of the Customs Act 1901, after BASF Australia Ltd applied for a tariff concession order on 27 April 2007. The policy objective behind this legislation is to provide tariff relief to importers of the specified goods by reducing the duty rate from 5% to free, thus potentially stimulating economic activity and supporting the competitiveness of Australian businesses.
The Tariff Concession Order was published in the Gazette, inviting any person who believed the concession should not be granted to lodge a submission with the CEO; however, no submissions were received. The order came into force on the date the application was lodged, 27 April 2007, and does not affect the rights of any person, including the ability for importers to apply for a refund of duty on goods imported since the effective date of the order. This legislative instrument aims to provide a streamlined process for granting tariff concessions while ensuring that the rights of all parties are protected.
Scope and Application
The Tariff Concession Instrument No. 0706158 under the Customs Act 1901 applies specifically to the concessions on customs duty for certain polybutylene terephthalate and polyethylene terephthalate alloy granules. This concession was granted to BASF Australia Ltd following their application on 27 April 2007, and it became effective from that date. The primary purpose of this instrument is to reduce the duty on specified goods to zero, provided the Chief Executive Officer of Customs determines that no substitutable goods are produced in Australia in the ordinary course of business. The instrument operates within the Commonwealth jurisdiction, impacting entities involved in the importation of these specific goods and benefiting importers by potentially allowing them to apply for a refund of duty on imports made since the TCO's effective date. Notably, this concession does not affect the rights of any person other than the Commonwealth, ensuring that no one is disadvantaged or incurs liabilities for actions taken before the TCO's registration.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO applies a lower rate of customs duty to specified goods. For an application to be considered, it must not concern goods listed in section 269SJ, which cannot be subject to a TCO. The CEO evaluates the application against core criteria, primarily if no substitutable goods are being produced in Australia at the time of application (s 269C). Substitutable goods are those produced domestically that can be used interchangeably with the goods in question (s 269D, s 269E, s 269B).
Upon determining that an application meets the criteria, the CEO issues a written TCO (s 269P(3)). This written order specifies the goods and the applicable item from Schedule 4 of the Customs Tariff Act 1995, thereby applying a prescribed rate of duty. For instance, TCO No 0706158, issued on 13 July 2007, declared that certain polybutylene terephthalate and polyethylene terephthalate alloy granules are subject to free duty, instead of the general rate of 5%. The TCO becomes effective from the date the application was lodged (s 269S(1)).
The Act mandates the CEO to publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not proceed (s 269K(1)). In this instance, no submissions were received. The TCO does not retroactively affect rights or impose liabilities on anyone except the Commonwealth (s 269S(1)). Importers benefit from the ability to apply for duty refunds on goods imported since the effective date of the TCO (Reg 126(1)(r)).
Breaching the provisions of the Customs Act 1901 can lead to various penalties. These may include fines and imprisonment for serious offences, as outlined in the Act and the associated regulations. The maximum penalties can vary depending on the specific breach and the discretion of the court. Compliance with the Act is crucial, as failure to adhere to the stipulated requirements can result in significant legal consequences.