EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802636
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.
Multix Pty Ltd applied for a TCO in respect of certain polyethylene film on 14 February 2008.
Instrument
TCO No 0802636 was made on 27 June 2008. It declares that those certain polyethylene film 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. One submission objecting to the TCO application was received from Aperio Group.
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. 0802636 is taken to have come into force on 14 February 2008.
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 amended to introduce Tariff Concession Orders (TCOs) under Part XVA, which allow for lower rates of customs duty on certain goods. Enacted by the Australian Parliament, this legislation aims to address the gap in providing tariff relief for goods that are not produced domestically and have no substitutable Australian goods, thereby encouraging the import of such goods. The primary policy objective is to foster competition and efficiency within the Australian market by ensuring that consumers and businesses have access to a broader range of affordable products. The explanatory statement outlines the process of applying for a TCO, the criteria for approval, and the consultation requirements, demonstrating the legislative intent to balance economic benefits with fair market practices.
Scope and Application
The Tariff Concession Instrument No. 0802636, made under the Customs Act 1901, applies to individuals or entities seeking to import specific polyethylene films into Australia. This instrument was issued following an application by Multix Pty Ltd, and it became effective on 14 February 2008, the date the application was lodged. The instrument provides a tariff concession, reducing the customs duty rate on the specified polyethylene films from the general rate of 5% to a rate of zero, effectively granting free entry for these goods. The application of the Tariff Concession Order (TCO) is contingent upon the Chief Executive Officer of Customs determining that no substitutable goods are produced in Australia, as defined under the Customs Act. The instrument also outlines the process for objections to TCO applications, with an opportunity for public submissions provided to any interested party. Notably, the TCO does not affect existing rights or impose liabilities on any person except the Commonwealth, and it allows for duty refunds for importers of the specified goods from the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, as relevant to Tariff Concession Instrument No. 0802636, are sections 269C, 269F, 269K, 269P, and 269S. Section 269F (3) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO), which grants a lower rate of customs duty on specified goods. If the CEO is satisfied that the application meets the core criteria set out in section 269C, and that the goods are not specified in section 269SJ, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, and section 269P outlines the process for making a TCO if the core criteria are met. Section 269S stipulates that a TCO comes into force on the day the application is lodged.
The Act imposes specific obligations on the CEO, including the duty to determine whether an application meets the core criteria for a TCO, to publish a notice in the Gazette inviting submissions, and to make a written order if the application meets the criteria. Additionally, it mandates that any rights of a person (other than the Commonwealth) as at the date of registration are not to be disadvantaged or impose liabilities for actions taken before the date of registration. Importers of the specified goods are entitled to apply for a refund of duty under paragraph 126(1)(r) of the Regulations.
Breach of the requirements set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not explicitly outline specific offences or penalties, it is understood that non-compliance with customs regulations can result in civil or criminal penalties. For instance, knowingly making a false statement or representation in a customs document can attract a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, under section 259 of the Customs Act. Additionally, failure to comply with the Act's provisions regarding the importation of goods can result in the seizure of goods, fines, and other legal repercussions as determined by the relevant authorities.