EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715525
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.
Polychem Pty Ltd applied for a TCO in respect of certain plastic recycling line on 18 September 2007.
Instrument
TCO No 0715525 was made on 30 November 2007. It declares that those certain plastic recycling lines 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. 0715525 is taken to have come into force on 18 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, enacted by the Australian Parliament, establishes a framework for the regulation of customs duties and the facilitation of international trade. Specifically, Part XVA of the Act provides for the creation of Tariff Concession Orders (TCOs) which offer lower rates of customs duty on certain goods, subject to certain criteria being met. This legislative instrument aims to address the problem of high tariffs on imported goods that have no local substitute, thereby promoting the efficiency and competitiveness of Australian businesses that rely on importing specific goods. The explanatory statement outlines Tariff Concession Instrument No. 0715525, made under the authority of the Customs Act 1901, which grants a tariff concession to Polychem Pty Ltd for certain plastic recycling lines, effective from 18 September 2007. The policy objective is to reduce the duty on these goods from the general rate of 5% to free, provided no substitutable goods are produced in Australia, thereby encouraging the importation and use of these specific goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0715525, under the Customs Act 1901, applies specifically to those who seek tariff concessions for certain plastic recycling lines. This instrument targets the entities or individuals who have applied for and are seeking tariff concessions on these goods, ensuring that the application is made in accordance with the core criteria outlined in the Act. The scope of this legislation extends to the conduct and transactions involving the importation of these specific goods, allowing for a lower rate of customs duty if the application criteria are met. Geographically, this Act operates under the Commonwealth jurisdiction, thereby applying uniformly across Australia. Any exclusions or exemptions under this Act pertain to goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. The application and enforcement of this legislation may be further extended or restricted through subordinate instruments, which are not specified in the explanatory statement but are a part of the broader legal framework.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0715525 are sections 269C, 269P, and 269S, which outline the criteria for a Tariff Concession Order (TCO) and its effect. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order (a TCO) declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S provides for the commencement of a TCO on the day the application was lodged. For the goods in question, this means the TCO came into effect on 18 September 2007, the day Polychem Pty Ltd applied for it.
The Act imposes several obligations on the CEO of Customs, including the requirement to assess whether a TCO application meets the core criteria as outlined in section 269C. If the CEO is satisfied that the application meets the criteria, they must make a TCO as stated in section 269P. Furthermore, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on the application. In this case, no submissions were received, so the CEO proceeded with the TCO. The Act also ensures that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person except the Commonwealth.
For breaches of the provisions under the Customs Act 1901, including any improper application for or issuance of a TCO, there may be significant consequences. Although specific penalties for these offences are not detailed in the explanatory statement, they could include fines and imprisonment under the general provisions of the Act. The exact penalties would depend on the nature and severity of the breach, as well as any relevant state or federal laws. The Act’s overarching purpose is to ensure the fair and efficient administration of customs duties and related regulations, and any breach of these provisions could result in severe penalties to maintain the integrity of the customs system.