EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028171
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 polyethylene terephthalate film on 24 June 2010.
Instrument
TCO No 1028171 was made on 20 September 2010. It declares that those certain polyethylene terephthalate 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. 1028171 is taken to have come into force on 24 June 2010.
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, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This mechanism allows for a lower rate of customs duty to apply to goods that are the subject of a TCO. The act was introduced to address the need for flexibility in tariff rates, facilitating the importation of goods that are not produced domestically or for which there are no suitable substitutes available in Australia. The policy objective is to encourage the efficient use of resources by allowing lower duties on imported goods that are not manufactured locally, thus potentially lowering consumer prices and promoting trade. In this context, TCO No. 1028171, made on 20 September 2010, granted a concession for certain polyethylene terephthalate film, reducing the general rate of duty from 5% to free, effective from 24 June 2010, the date the application was lodged. This measure was taken after the CEO confirmed that no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that can lower the rate of customs duty on specific goods. This legislation applies to any person or entity that wishes to apply for a TCO for goods that are not explicitly excluded by section 269SJ of the Act. The scope of the legislation extends to any goods that are subject to a TCO, provided that no substitutable goods are produced in Australia at the time of application, as stipulated by section 269C. The application of a TCO is national, affecting all importers and relevant industry sectors that import the goods specified in the TCO. Exclusions are limited to the goods listed in section 269SJ, which are not eligible for tariff concessions. The Act also allows for the CEO to extend or restrict the application of a TCO through subordinate instruments, ensuring flexibility in managing the concession scheme. The application process is transparent, as the CEO must publish a notice in the Gazette inviting submissions from interested parties before making a decision on the TCO application.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1028171 are found under sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows for the application of a Tariff Concession Order (TCO) by a person to the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that the application meets the core criteria specified in section 269C, they must make a TCO under section 269P. Section 269C stipulates that the application meets the core criteria if, on the day of application, no substitutable goods were produced in Australia in the ordinary course of business.
The Act imposes certain obligations on the parties involved in the TCO process. Firstly, applicants must ensure that their application for a TCO is not in respect of goods specified in section 269SJ, which are ineligible for tariff concessions. Secondly, the CEO must evaluate whether the application meets the core criteria by confirming that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied, they must issue a TCO as per section 269P.
Under the Customs Act 1901, there are no explicit offences, penalties, or civil/criminal consequences outlined for breach of the TCO provisions. However, failure to comply with the conditions of the TCO or any misrepresentation in the application process could potentially lead to investigations and actions under general provisions of the Customs Act or related legislation. The focus of the TCO framework is primarily on the procedural correctness of the application and the CEO's decision-making process.