EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804720
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 (Asia Pacific) Pty Ltd applied for a TCO in respect of certain biaxially oriented polypropylene film on 26 March 2008.
Instrument
TCO No 0804720 was made on 20 June 2008. It declares that those certain biaxially oriented 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. 0804720 is taken to have come into force on 26 March 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 Tariff Concession Instrument No. 0804720, made under the Customs Act 1901, was enacted to provide tariff concessions for certain biaxially oriented polypropylene film, specifically addressing the application by Innovia Films (Asia Pacific) Pty Ltd on 26 March 2008. This instrument was designed to address the gap in the tariff regime by providing a lower rate of customs duty for these goods, effectively offering a tariff concession where no substitutable goods were produced in Australia at the time of the application. The instrument was issued by the Chief Executive Officer of Customs, pursuant to the legislative framework established by the Customs Act 1901, with the objective of ensuring that the application met the core criteria outlined in the Act, particularly under section 269C, which requires that no substitutable goods were produced domestically on the day the application was lodged. The instrument was published in the Gazette to allow for public submissions, though none were received, leading to its effective implementation on the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0804720, under the Customs Act 1901, applies specifically to the process of granting tariff concessions on certain goods, in this case, biaxially oriented polypropylene film. The application of this Act is directed towards entities or individuals who seek to import goods that are subject to customs duty and wish to benefit from a lower rate of duty as specified in a Tariff Concession Order (TCO). This mechanism is facilitated by the Chief Executive Officer of Customs (CEO), who is responsible for assessing and granting these concessions if the criteria outlined in the Act are met. The geographic reach of this legislation is national, as it pertains to customs duties applicable across Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act, which includes certain restricted or prohibited items that cannot be subject to a TCO. Furthermore, the application process and the concessions granted do not affect the rights of any person other than the Commonwealth nor impose any liabilities on individuals or entities for actions taken before the TCO is registered. The TCO itself came into effect on the date the application was lodged, which in this instance was 26 March 2008.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0804720, are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). This order results in a lower rate of customs duty being applied to the specified goods if the CEO determines that the application meets the core criteria set out in section 269C. Under section 269P, once the CEO is satisfied that the application meets the criteria, they must issue a written TCO specifying the new customs duty rate applicable to the goods.
The Customs Act 1901 imposes several obligations on the parties involved. The CEO must ensure that the goods specified in a TCO application are not listed in section 269SJ, which identifies goods that cannot be subject to a TCO. Additionally, the CEO must verify that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C. The CEO is also required to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not proceed. For applicants, the obligation is to provide sufficient evidence that no substitutable goods were produced in Australia.
There are no explicit offences or penalties detailed in the explanatory statement for breaches of this specific TCO. However, the Customs Act 1901 generally provides for various penalties for breaches related to customs duties and other regulations. These can include fines and imprisonment for serious breaches, as well as civil penalties for lesser infractions. The exact penalties would depend on the nature and severity of the breach, as outlined in the broader provisions of the Customs Act 1901.
In summary, Tariff Concession Instrument No. 0804720 facilitates the application process for tariff concessions under the Customs Act 1901, ensuring that the CEO follows a structured approach in reviewing and approving applications. The obligations lie with the CEO to assess applications correctly and with applicants to provide accurate information. While specific penalties for breaches are not detailed in this explanatory statement, general penalties under the Customs Act 1901 apply to ensure compliance.