EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0832611
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.
Jasco Pty Ltd applied for a TCO in respect of certain polypropylene film 224mm on 24 September 2008.
Instrument
TCO No 0832611 was made on 12 December 2008. It declares that those certain polypropylene film 224mm 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. 0832611 is taken to have come into force on 24 September 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. 0832611 was enacted in 2008 under the Customs Act 1901 to provide a framework for the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This legislation was introduced to address the need for a streamlined process for businesses to apply for reduced customs duties on goods that are not produced domestically. The Tariff Concession Orders (TCOs) enable a lower rate of customs duty to be applied to specified goods, provided that no substitutable goods are produced in Australia at the time of application. This measure aims to support industries by reducing the cost of importing necessary materials, thereby potentially stimulating economic activity and enhancing competitiveness.
The instrument was established following an application from Jasco Pty Ltd for tariff concessions on certain polypropylene film 224mm, which was accepted as valid by the CEO. The Customs Act 1901 requires the CEO to consult with the public upon accepting a valid application and to consider any submissions regarding the concession. In this instance, no submissions were received, leading to the issuance of TCO No. 0832611 on 12 December 2008. This order declared that the specified polypropylene film 224mm would be subject to a free rate of duty, effectively reducing the previously applicable general rate of 5%. The TCO came into force on the date of the application, 24 September 2008, and does not impose any liabilities or adversely affect the rights of any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, as amended, includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders apply to specific goods and provide for a lower rate of customs duty compared to the general tariff. A TCO can be applied for by any person, subject to certain exclusions outlined in section 269SJ of the Act, which includes goods that are either prohibited or restricted. If the CEO determines that the application meets the core criteria, primarily that no substitutable goods are produced in Australia, they must issue a written order, a TCO, specifying the applicable tariff item. For instance, Tariff Concession Order No. 0832611 pertains to certain polypropylene film 224mm, reducing the duty from 5% to free. This order applies nationally and commenced on the date of the application, 24 September 2008, without retroactive effect on past transactions. The TCO does not disadvantage any non-Commonwealth person and allows importers to apply for duty refunds on imports since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0832611 under the Customs Act 1901 (section 269F) is a significant legislative provision that allows for the application of tariff concessions to certain goods. When a Tariff Concession Order (TCO) is made by the Chief Executive Officer of Customs (section 269P(3)), it stipulates that a lower rate of customs duty applies to the specified goods. In this instance, the TCO No. 0832611 was made on 12 December 2008, declaring that certain polypropylene film 224mm is subject to a duty rate of free, as opposed to the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995). This concession is contingent on the CEO being satisfied that no substitutable goods were produced in Australia at the time of the application.
Entities and individuals subject to the Customs Act 1901 are obligated to comply with the terms of the TCO. The CEO’s decision-making process requires that an application for a TCO be made in good faith and that the applicant provide sufficient information to satisfy the CEO that the core criteria are met. This includes ensuring that no substitutable goods are produced in Australia (section 269C). Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties, although in this case, no submissions were received. The commencement of the TCO is effective from the date the application was lodged, which is 24 September 2008 for TCO No. 0832611 (subsection 269S(1)).
Failure to comply with the provisions of the Customs Act 1901, including the requirements for a TCO, could result in various penalties and consequences. While the explanatory statement does not specify particular offences or penalties for breaching the TCO, the Act generally includes provisions for both civil and criminal penalties for non-compliance with customs regulations. These can include fines and imprisonment, depending on the nature and severity of the breach. The specifics of the penalties would be determined in accordance with the broader provisions of the Customs Act 1901 and associated regulations.
The TCO does not adversely affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on any person in respect of actions taken prior to the TCO's effective date. Importers stand to benefit from this concession, as they may apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). This ensures that the benefits of the tariff concession are passed on to those who have already imported the goods before the TCO was issued.