EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909027
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.
Dfc Packaging applied for a TCO in respect of certain polyester film on 17 March 2009.
Instrument
TCO No 0909027 was made on 29 May 2009. It declares that those certain polyester 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. 0909027 is taken to have come into force on 17 March 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 Australian Parliament, established a framework for the regulation of customs duties, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods. The Tariff Concession Instrument No. 0909027, made on 29 May 2009, addresses the specific issue of applying a tariff concession to certain polyester film, where it was determined that no substitutable goods were produced in Australia in the ordinary course of business. The policy objective of this instrument is to provide a tariff concession to Dfc Packaging for these goods, thereby reducing their customs duty from the general rate of 5% to a free rate, and to ensure that the rights of importers are beneficially affected without imposing any liabilities on any person. This instrument is effective as of 17 March 2009, the date the application was lodged, and it does not affect the rights of any person other than the Commonwealth with respect to actions taken before its registration.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on certain goods. This Act applies to any person or entity that wishes to apply for a TCO in respect of goods that are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The application process requires the Chief Executive Officer of Customs (CEO) to determine whether the applicant’s goods meet the core criteria, primarily by ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The CEO’s decision to grant a TCO is based on the assessment of these criteria, leading to the issuance of a written order that declares the goods eligible for a specified tariff concession. The TCO No. 0909027, for instance, was made on 29 May 2009, declaring certain polyester film as eligible for duty-free treatment under the Customs Tariff Act 1995. The Act’s jurisdictional reach is national, affecting all entities involved in the importation of the specified goods across Australia. However, the Act does not disadvantage any person or impose liabilities on individuals for actions taken prior to the registration of the TCO, ensuring that only future transactions are affected by the concessions granted.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0909027 under the Customs Act 1901 (section 269F) involve the application process for Tariff Concession Orders (TCOs). When a person applies for a TCO in respect of certain goods, such as the polyester film applied for by Dfc Packaging on 17 March 2009, the Chief Executive Officer of Customs (CEO) must consider the application (section 269SJ). If the CEO determines that the application is valid and not for goods specified in section 269SJ, the application must be assessed against the core criteria, which are detailed in sections 269C, 269B, 269D, 269E, and 269P(3). In this case, the CEO was satisfied that no substitutable goods were produced in Australia in the ordinary course of business, leading to the approval of the TCO.
The obligations imposed by this Act on the parties involved primarily concern the application process and the decision-making criteria for TCOs. The CEO is required to publish a notice in the Gazette inviting submissions from any interested parties once an application is deemed valid (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO. Additionally, the TCO must declare that the specified goods meet the prescribed criteria outlined in the Customs Tariff Act 1995, as demonstrated in TCO No. 0909027 which applies item 50 of Schedule 4 to the Tariff, resulting in a duty rate of free for the specified polyester film.
In terms of breaches and penalties, the Act does not explicitly outline specific offences or penalties for failing to comply with the requirements of a TCO or the application process. However, the general legal framework under the Customs Act 1901 would apply, where non-compliance with customs regulations could lead to civil or criminal penalties. For instance, under the Customs Act, failure to comply with certain provisions might result in fines or imprisonment. In the context of TCOs, if an entity were to misuse the concession or engage in fraudulent practices to obtain a TCO, they could face penalties under relevant sections of the Customs Act, including fines or imprisonment as prescribed by law.