EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0816957
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.
Plastral Pty Ltd applied for a TCO in respect of certain glycol modified polyethylene terephthalate on 10 July 2008.
Instrument
TCO No 0816957 was made on 26 September 2008. It declares that those certain glycol modified polyethylene terephthalate 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. 0816957 is taken to have come into force on 10 July 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, enacted by the Australian Parliament, provides the framework for imposing customs duties on goods imported into Australia. This Act includes provisions for Tariff Concession Orders (TCOs), which allow for lower rates of customs duty on specified goods under certain conditions. The Tariff Concession Instrument No. 0816957 was introduced to address a specific need identified by Plastral Pty Ltd, which sought tariff concessions for certain glycol modified polyethylene terephthalate. The policy objective is to facilitate the importation of goods that are not produced domestically, thereby benefiting importers and potentially stimulating economic activity by making imported goods more competitively priced. The Chief Executive Officer of Customs, upon reviewing the application and finding that no substitutable goods were produced in Australia, issued the TCO, granting a tariff concession that sets the duty rate at zero, down from the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0816957 applies to the specific goods, namely certain glycol modified polyethylene terephthalate, as requested by Plastral Pty Ltd. The Customs Act 1901 enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that grant lower rates of customs duty on specified goods, provided certain criteria are met. The Act applies to any person who applies for a TCO for goods that are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The geographic reach of this Act is national, as it operates under the Commonwealth's legislative authority. The Act does not apply to goods that are already being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The application of the Act can be extended or restricted through subordinate instruments such as regulations, which may further define terms or specify additional conditions. The Tariff Concession Order in question became effective on the date the application was lodged, which was 10 July 2008, and it provides a duty-free rate for the specified glycol modified polyethylene terephthalate, replacing the general rate of 5%.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0816957, under the Customs Act 1901, include sections 269C, 269B, 269D, 269E, and 269P, which provide the criteria and process for applying for a Tariff Concession Order (TCO). Specifically, section 269C mandates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must issue a written order (section 269P(3)) that declares the goods subject to the concession, as seen in the case of TCO No. 0816957 for glycol modified polyethylene terephthalate.
The Act imposes certain obligations and requirements on both the CEO and applicants for a TCO. For the CEO, section 269K(1) mandates that they must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit any reasons why the TCO should not be made. In this case, the CEO did not receive any submissions. For applicants, section 269F allows them to apply to the CEO for a TCO in respect of goods, provided the goods do not fall under the exclusions listed in section 269SJ. The applicant must demonstrate that the goods are not substitutable by any goods produced in Australia and meet the other core criteria specified in the Act.
The Customs Act 1901 does not explicitly detail specific offences, penalties, or civil/criminal consequences for breaches related to the issuance or non-compliance with a TCO. However, the implications of failing to adhere to the provisions and criteria set forth in the Act and the TCO could potentially lead to disputes over duty refunds or other customs-related issues. While the Act focuses on the procedural and substantive criteria for TCOs, compliance with these provisions is crucial to avoid any adverse outcomes for the parties involved.