EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711640
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.
Visy Industries applied for a TCO in respect of certain polyethylene terephthalate injection moulding on 18 July 2007.
Instrument
TCO No 0711640 was made on 21 September 2007. It declares that those certain polyethylene terephthalate injection moulding 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. 0711640 is taken to have come into force on 18 July 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. 0711640 was enacted in 2007 under the Customs Act 1901 to address the need for tariff concessions for specific goods, in this case certain polyethylene terephthalate injection moulding. This legislation was introduced to facilitate lower rates of customs duty for goods that are not produced in Australia and for which there are no substitutable goods domestically produced. The instrument was created by the Chief Executive Officer of Customs, following an application by Visy Industries, and was designed to ensure that the application met the core criteria outlined in the Act. The instrument was published in the Gazette with an invitation for submissions, though none were received, and it came into force on the date the application was lodged, 18 July 2007. This measure is intended to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into effect, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the establishment of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislation applies to any person or entity that seeks to import goods eligible for a reduced rate of customs duty under the scheme, provided the goods are not specified as ineligible under section 269SJ of the Act. The geographic reach of this Act is national, applying across Australia and governed by Commonwealth law. The Act sets out specific criteria that must be met for a TCO application to be considered, notably that no substitutable goods should be produced in Australia at the time of application, as defined in sections 269C, 269D, and 269E. In the case of TCO No. 0711640, the CEO was satisfied that certain polyethylene terephthalate injection mouldings met these criteria, resulting in a TCO that effectively reduced the customs duty rate from 5% to 0%. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect existing rights as at the date of registration. The commencement of a TCO is effective from the date the application is lodged, as per subsection 269S(1) of the Act.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0711640 under the Customs Act 1901, are sections 269C, 269F, 269P, and 269SJ (sections 269C, 269F, 269P, and 269SJ). Section 269F allows for the application for a Tariff Concession Order (TCO), whereby a lower rate of customs duty can be applied to certain goods. The core criteria for a TCO, as set out in section 269C, require that on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must make a written order (section 269P(3)) declaring the goods to which the concession applies (section 269P(3)). It is important to note that certain goods, as specified in section 269SJ, cannot be the subject of a TCO.
The obligations and requirements imposed by the Act on the parties it governs are centred around the application and approval process for a TCO. The CEO must ensure that any TCO application is reviewed against the core criteria set out in the Act. Specifically, the CEO must verify that no substitutable goods were produced in Australia before granting the concession. Additionally, the CEO is mandated to publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit their views on the application. In this case, no submissions were received, indicating a lack of opposition to the concession.
Under the Customs Act 1901, breaches of the provisions regarding TCOs could result in both civil and criminal consequences. The specific offences and penalties are not detailed within the explanatory statement provided. However, general provisions of the Act suggest that unauthorised importation of goods or fraudulent applications could lead to fines or imprisonment. The severity of penalties would depend on the nature and extent of the breach, as outlined in the broader Customs Act and associated regulations.
The Tariff Concession Order No. 0711640, effective from 18 July 2007, applies a zero percent duty rate to certain polyethylene terephthalate injection moulding, reducing the general duty rate of 5 percent. This concession is contingent upon the CEO's satisfaction that no substitutable goods were produced in Australia. The order ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the concession's effective date. Importantly, the TCO does not impose any liabilities on any person, safeguarding against any disadvantage to individuals other than the Commonwealth.