EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713671
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.
Poli Film Australia Pty Ltd applied for a TCO in respect of certain polyurethane film on 27 September 2007.
Instrument
TCO No 0713671 was made on 14 December 2007. It declares that those certain polyurethane 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. 0713671 is taken to have come into force on 27 September 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 was enacted by the Commonwealth Parliament to regulate the importation and exportation of goods into and out of Australia. Part XVA of the Act establishes a framework for Tariff Concession Orders (TCOs), which allow the Chief Executive Officer of Customs to reduce or eliminate customs duties on specified goods. This legislative provision was introduced to address the need for flexible tariff arrangements that could support economic development and trade. The explanatory statement for Tariff Concession Instrument No. 0713671, issued on 14 December 2007, provides details on a specific instance where a TCO was granted to Polyurethane Film Australia Pty Ltd for certain polyurethane films, reducing the duty rate from 5% to free. The instrument was made after it was determined that no substitutable goods were produced in Australia, aligning with the core criteria set out in the Customs Act 1901. The objective was to ensure that the rights of importers were beneficially affected and no new liabilities were imposed on any person.
Scope and Application
The Tariff Concession Instrument No. 0713671 under the Customs Act 1901 applies to specific polyurethane films for which Poli Film Australia Pty Ltd applied on 27 September 2007. This instrument pertains to goods that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (CEO), provided that these goods do not fall under the restricted category outlined in section 269SJ of the Act. The instrument’s jurisdiction is governed by the Commonwealth of Australia, affecting the customs duty rates applicable to these goods. The application of the TCO is effective from the date of the application, 27 September 2007, as per subsection 269S(1) of the Act, and does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth. The CEO was required to publish a notice in the Gazette inviting any interested parties to submit objections, none of which were received. The TCO alters the duty rate for the specified polyurethane films from the general rate of 5% to free of charge, benefiting importers who can apply for duty refunds on imports made since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0713671 (sections 269C, 269F, and 269P) outline the process for applying for a Tariff Concession Order (TCO) under the Customs Act 1901 (section 269F). If an application is made and the Chief Executive Officer of Customs (CEO) determines that the application meets the core criteria, the CEO must issue a written order (section 269P(3)) declaring that the specified goods are eligible for the concession. The core criteria, detailed in section 269C, require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B and 269D define terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', ensuring clarity in the application process.
The obligations imposed by this Act on the parties involved are quite specific. The applicant, such as Poli Film Australia Pty Ltd, must submit a valid application to the CEO for a TCO, ensuring it pertains to goods not listed in section 269SJ of the Act, which excludes certain goods from TCO eligibility (section 269F). The CEO, upon receiving an application, has the duty to assess whether the application meets the core criteria set out in section 269C. If satisfied, the CEO must make a TCO and publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the CEO proceeds to issue the TCO. Importers, on the other hand, benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations).
Breaches of the obligations and requirements outlined in the Act may lead to various consequences. While the explanatory statement does not explicitly detail offences, penalties, or civil/criminal consequences for non-compliance, it is implicit that failure to adhere to the TCO application process or misuse of the concessions could result in legal ramifications. The Customs Act 1901 likely contains provisions for enforcement and penalties for violations, which might include fines or other sanctions. However, the specific penalties are not detailed in the explanatory statement provided. Nonetheless, it is clear that any breach of the established criteria or misuse of the TCO could result in legal action against the offending party.