EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714124
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.
Avery Dennison Materials Pty Ltd applied for a TCO in respect of certain polyvinyl chloride film on 03 September 2007.
Instrument
TCO No 0714124 was made on 09 November 2007. It declares that those certain polyvinyl chloride 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. 0714124 is taken to have come into force on 03 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 Parliament of Australia to regulate the import and export of goods within Australia. This legislation allows for the establishment of Tariff Concession Orders (TCOs) which provide lower rates of customs duty on specific goods, enhancing trade efficiency and economic competitiveness. The problem or gap that this Act addresses includes the need to ensure that Australian businesses are not unduly disadvantaged by high customs duties on goods that can be sourced domestically or are not currently being produced in Australia. The Act was introduced to provide a mechanism for businesses to apply for tariff concessions on specific goods if they can demonstrate that there are no substitutable goods produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0714124, made under the Customs Act, clarifies that the Chief Executive Officer of Customs must consider whether an application for a TCO meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged. The policy objective is to facilitate smoother trade by reducing the customs duty on goods where appropriate, thereby benefiting importers and potentially boosting economic activity.
Scope and Application
The Tariff Concession Instrument No. 0714124 under the Customs Act 1901 applies to goods specified in the instrument, namely certain polyvinyl chloride films, which are now subject to a concessional rate of customs duty as opposed to the general rate of 5%. The instrument applies to Avery Dennison Materials Pty Ltd as the applicant and to any other entity importing the specified goods into Australia. The instrument is issued by the Chief Executive Officer of Customs, who must ensure that the goods in question are not substitutable with any produced domestically and meet the core criteria set out in the Act. The instrument has national jurisdictional reach, applying across Australia and extending to any importer of the specified goods. The instrument does not apply to goods listed in section 269SJ of the Act, which cannot be subject to a TCO. The instrument came into effect on 3 September 2007, the date the application was lodged, and does not affect any rights or impose any liabilities on persons other than the Commonwealth in respect of actions taken prior to its registration. The instrument’s application may be extended or refined through subordinate instruments as necessary.
Key Provisions
The Tariff Concession Instrument No. 0714124 under the Customs Act 1901 (sections 269C, 269F, 269P) outlines the process for granting tariff concessions on certain goods. Specifically, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, a TCO is issued. In this instance, Avery Dennison Materials Pty Ltd applied for a TCO regarding certain polyvinyl chloride films, which was granted on 09 November 2007 (section 269P(3)). This order specifies that these films are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with the rate of duty reduced from 5% to free.
The Act imposes certain obligations on the CEO when handling TCO applications. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections (subsection 269K(1)). The CEO must then consider any submissions received before deciding whether to issue the TCO. If no submissions are received, as was the case with TCO No. 0714124, the CEO proceeds to issue the TCO if the application meets the core criteria. The core criteria, as specified in section 269C, require that no substitutable goods were produced in Australia on the day the application was lodged.
For breaches or non-compliance with the provisions of the Customs Act 1901, various penalties and consequences may apply. While the explanatory statement does not detail specific penalties for breaches related to TCOs, the general penalties for contravening the Customs Act can include fines and imprisonment. The exact penalties depend on the nature and severity of the breach, with potential maximum penalties varying according to the specific offence under the Act. Importers who benefit from a TCO can also apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, nor does it affect the rights of a person (other than the Commonwealth) as at the date of registration.