EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0818944
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.
Avery Dennison Materials Pty Ltd applied for a TCO in respect of certain polyvinyl chloride film on 16 July 2008.
Instrument
TCO No 0818944 was made on 10 October 2008. It declares that those certain polyvinyl chloride 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. 0818944 is taken to have come into force on 16 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 Tariff Concession Instrument No. 0818944 was enacted in 2008 as part of the Customs Act 1901. This legislation was introduced to address the need for a streamlined process for applying tariff concessions on specific goods, thereby facilitating more efficient trade practices. The Customs Act 1901, managed by the Australian Parliament, aims to provide a framework for the administration of customs duties and provides the mechanism for the Chief Executive Officer of Customs to grant tariff concessions through Tariff Concession Orders. The policy objective of this specific instrument was to ensure that certain polyvinyl chloride film, for which Avery Dennison Materials Pty Ltd applied, would benefit from a reduced rate of customs duty, thereby enhancing trade efficiency and economic benefits for importers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) to provide lower rates of customs duty on certain goods. This legislation applies to any person or entity that wishes to apply for a TCO in respect of goods, provided the goods do not fall under the specific exclusions listed in section 269SJ of the Act. The process involves the applicant satisfying the core criteria, which includes demonstrating that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269C, 269D, and 269E of the Act. Once the CEO is satisfied that the application meets these criteria, they are mandated to issue a TCO. The scope of the Act is national, applying across all states and territories within Australia. Notably, the Act allows for further refinement and detail through subordinate instruments, which can extend or restrict the application of the primary legislation. The Tariff Concession Order No. 0818944, for example, pertains to certain polyvinyl chloride films and was issued following an application by Avery Dennison Materials Pty Ltd on 16 July 2008, coming into force on the same day. This specific TCO lowered the duty rate on these films from 5% to free, effective from the date of the application.
Key Provisions
The main operative sections of the Customs Act 1901, as related to Tariff Concession Orders (TCOs), are section 269C (which defines the core criteria for a TCO application), section 269F (which allows a person to apply to the Chief Executive Officer of Customs for a TCO), and section 269P (which requires the CEO to make a written order if the application meets the core criteria). Specifically, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This means that the goods in question must not have a substitute that is produced domestically and serves a similar purpose. If the CEO is satisfied with the application, they must make a written order, as specified in section 269P(3), declaring the goods subject to the TCO and applying a prescribed item from Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO must ensure that any TCO application is not in respect of goods specified in section 269SJ, which includes goods that cannot be subject to a TCO. Once an application is deemed valid, the CEO must publish a notice in the Gazette (subsection 269K(1)), inviting any interested parties to lodge submissions opposing the TCO if they believe it should not be made. If no submissions are received, the CEO proceeds to decide on the application. Furthermore, the Act ensures that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, so as to disadvantage that person or impose liabilities in respect of anything done or omitted before the registration date.
In terms of breaches and consequences, the Act does not explicitly detail specific offences or penalties related to the TCO process itself. However, the general provisions of the Customs Act 1901 apply, meaning that any fraudulent or dishonest attempts to secure a TCO, or any misrepresentation of facts in an application, could lead to criminal charges. Such offences could result in penalties including substantial fines and imprisonment, as stipulated in other parts of the Customs Act. Additionally, if an importer or any other party misuses the TCO by, for example, submitting false information to secure a tariff concession, they could face civil or administrative penalties, including fines and the requirement to pay back any incorrectly received tariff concessions.