EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802869
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.
Innovia Films Pty Ltd applied for a TCO in respect of certain polypropylene film on 19 February 2008.
Instrument
TCO No 0802869 was made on 16 May 2008. It declares that those certain polypropylene 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. 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. 0802869 is taken to have come into force on 19 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 enacted by the Parliament of Australia to regulate customs duties, among other things, and includes provisions for Tariff Concession Orders (TCOs). The 2008 Tariff Concession Instrument No. 0802869 was introduced to address the specific needs of Innova Films Pty Ltd, who applied for tariff concessions on certain polypropylene film, aiming to lower the customs duty from the general rate of 5% to free. The instrument was designed to ensure that the concession would not disadvantage any person other than the Commonwealth and would not impose any liabilities on individuals for actions taken before the instrument's registration. The objective was to facilitate the importation of these goods under more favourable tariff conditions, thereby benefiting importers who could apply for duty refunds for goods imported since the TCO's effective date.
Scope and Application
The Tariff Concession Instrument No. 0802869 applies to a specific category of goods, namely certain polypropylene film, as identified in the application submitted by Innovia Films Pty Ltd. The Act allows for the application of a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO), provided the core criteria are met. These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business. The instrument itself applies to the goods specified in the application and is enacted under the authority of Part XVA of the Customs Act 1901. This legislation operates at the national level, administered by the Commonwealth through the CEO of Customs. Notably, the application and issuance of a TCO are exempt from affecting any rights or imposing liabilities on persons other than the Commonwealth, particularly safeguarding the interests of importers who may benefit from refunds on duty for goods imported since the TCO's effective date. The scope of the TCO may be further defined or modified through subordinate instruments, although in this case, no additional instruments have been specified to extend or restrict its application.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0802869 include sections 269C, 269F, 269K, and 269S, among others. Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. Section 269C requires that the CEO assess whether the application meets the core criteria, particularly if no substitutable goods are produced in Australia in the ordinary course of business. Section 269K mandates the CEO to publish a notice in the Gazette inviting submissions on the TCO application, while section 269S outlines the effective date of the TCO, which is considered to be the day the application was lodged. If the CEO is satisfied that the application meets the core criteria, a TCO is issued, declaring that the specified goods will have a lower rate of customs duty as per the prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by this Act on the parties involved include the necessity for an individual to apply for a TCO if they wish to benefit from a lower customs duty rate for certain goods. The CEO must then evaluate whether the application meets the core criteria, particularly focusing on whether any substitutable goods are produced in Australia. The CEO also has a duty to publish a notice in the Gazette and invite submissions from any interested parties. If no objections are raised, the CEO must issue a TCO, which will come into effect from the day the application was lodged. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the TCO's effective date.
The Act does not explicitly detail offences, penalties, or civil/criminal consequences for breaches. However, it is implicit that failure to comply with the requirements of a TCO, such as attempting to import goods that do not qualify for a concession, could result in legal action. Customs duty regulations and other related legislation could impose penalties for non-compliance, including fines and potential criminal charges for fraudulent activities. The exact penalties would depend on the specific breach and the applicable laws at the time of the offence.