EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900721
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 Denison Materials Pty Ltd applied for a TCO in respect of certain polyethylene film on 13 January 2009.
Instrument
TCO No 0900721 was made on 22 May 2009. It declares that those certain polyethylene 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. One submission objecting to the TCO application was received from Shorko Australia Pty Ltd.
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. 0900721 is taken to have come into force on 13 January 2009.
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 Commonwealth Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The primary purpose of the Act is to provide for a scheme whereby a lower rate of customs duty applies to goods that are the subject of a TCO. This legislative instrument was introduced to address the need for tariff concessions to support specific industries and economic activities by reducing the customs duty on certain imported goods. The Tariff Concession Instrument No. 0900721, made on 22 May 2009, declares that certain polyethylene film are subject to a free rate of duty, having been assessed by the CEO to meet the core criteria specified in the Act. This decision followed an application by Avery Denison Materials Pty Ltd on 13 January 2009, and despite an objection from Shorko Australia Pty Ltd, the TCO was made effective from the date of the application. The policy objective is to facilitate the import of goods that are not produced in Australia, thereby supporting trade and industry.
Scope and Application
The Tariff Concession Instrument No. 0900721 under the Customs Act 1901 applies to entities or individuals who have applied for and received a Tariff Concession Order (TCO) for specific goods, in this case certain polyethylene film. The application of this Act is confined to those goods specified in the TCO, and it only applies within the geographical jurisdiction of Australia, governed by the Commonwealth. The Act facilitates a reduction in customs duty rates for goods that meet certain criteria, as outlined in the Act. The concession becomes effective from the date the application is lodged, which is 13 January 2009 in this instance, and it does not affect any existing rights or impose any new liabilities on persons other than the Commonwealth. Any person who believes there are reasons against the making of a TCO may submit their objections, although in this case, no objections were received that impacted the decision. The application of this Act may be extended or modified through subordinate instruments, which would further define the scope and specific conditions of the tariff concessions.
Key Provisions
The Tariff Concession Instrument No. 0900721, under the Customs Act 1901, establishes a framework for granting tariff concessions on certain goods. When an application for a Tariff Concession Order (TCO) is submitted and meets the core criteria, such as no substitutable goods being produced in Australia (section 269C), the Chief Executive Officer (CEO) of Customs must proceed to make a written order (section 269P(3)). This TCO will then apply a lower or free rate of customs duty to the specified goods (section 269F).
Obligations under this Act require that the CEO assess the validity of TCO applications by ensuring that the core criteria are met. This includes verifying that no substitutable goods are produced in Australia (section 269C), and publishing a notice in the Gazette to invite submissions from any interested parties (subsection 269K(1)). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth, and does not impose any liabilities on such persons (subsection 269S(1)). This is particularly important to note when determining the effective date of the TCO, which is considered to be the date on which the application was lodged.
Failure to comply with the provisions of the Customs Act 1901 may result in various civil and criminal consequences. While specific offences and penalties are not detailed within the explanatory statement, breaches of customs regulations can generally lead to significant financial penalties. For example, penalties can include fines and imprisonment, depending on the severity of the breach. The exact penalties would be determined based on the specific breach and the relevant sections of the Customs Act 1901. Additionally, the TCO does not affect the rights of any person other than the Commonwealth, ensuring that no one is unduly disadvantaged by its implementation.