EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505967
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.
Repaire Pacific Unit Trust applied for a TCO in respect of certain disposable nappy/diaper wrapping receptacle systems on 19 May 2005.
Instrument
TCO No 0505967 was made on 23 September 2005. It declares that the certain disposable nappy/diaper wrapping receptacle systems 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. 0505967 is taken to have come into force on 19 May 2005.
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, as amended, includes provisions for Tariff Concession Orders (TCOs) that offer reduced rates of customs duty on specified goods, provided certain criteria are met. Enacted by the Parliament of Australia, the legislation aims to facilitate trade by reducing the duty burden on specific goods, thus encouraging the importation of these items. In the case of Tariff Concession Instrument No. 0505967, the problem addressed was the need for tariff concessions on certain disposable nappy/diaper wrapping receptacle systems. The instrument was introduced to ensure that these goods, which have no substitutable Australian production, benefit from a concession, thereby reducing the customs duty from the general rate of 5% to free. The instrument was made by the Chief Executive Officer of Customs following an application by Repaire Pacific Unit Trust, and it came into effect on the date of the application, 19 May 2005. The policy objective is to support the importation of goods that are not domestically produced, thereby benefiting importers and potentially consumers by reducing the cost of such items.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, designed to provide tariff concessions on specified goods. The Act applies to any person or entity that seeks to import goods that are not produced in Australia and for which no substitutable goods are produced in the ordinary course of business. The application of the Act is national in scope, affecting all jurisdictions within Australia, and is not limited by state or territory boundaries. The Act’s provisions are inclusive, extending to all industries that import goods, but exclude goods specified in section 269SJ which are ineligible for tariff concessions. The Act allows for the extension or restriction of its application through subordinate instruments, providing flexibility in implementing tariff measures. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect the rights of parties or impose liabilities on them for actions taken before the order's registration.
Key Provisions
The Tariff Concession Instrument No. 0505967, under the Customs Act 1901, sets forth the terms for a Tariff Concession Order (TCO) applied to certain disposable nappy/diaper wrapping receptacle systems. According to section 269P(3) of the Act, if the Chief Executive Officer (CEO) of Customs is satisfied that the application for a TCO meets the core criteria, they must issue a written order declaring that the specified goods will be subject to a reduced rate of customs duty, in this case, free of charge instead of the general 5% duty rate (section 269F and Schedule 4 of the Customs Tariff Act 1995).
Entities applying for a TCO, such as Repaire Pacific Unit Trust, must ensure their application meets the criteria outlined in section 269C of the Act, which includes demonstrating that no substitutable goods were produced in Australia on the date the application was lodged. The CEO must also consider that the goods are not listed in section 269SJ, which specifies goods that cannot be subject to a TCO. Additionally, the CEO is required under section 269K(1) to publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made; in this case, no submissions were received.
Failure to comply with the obligations and requirements under the Customs Act 1901 and related regulations can result in significant legal consequences. For example, if a party fails to meet the core criteria for a TCO, the CEO may not issue the concession, and the applicant may face the standard duty rates. Furthermore, any misrepresentation or failure to provide accurate information in the application could lead to penalties under the relevant provisions of the Customs Act or other applicable laws. The Act does not specify maximum penalties for breaches of TCO provisions, but general penalties for breaches of the Customs Act can include fines and imprisonment.
Under the Act, the TCO is effective from the date the application was lodged, meaning that importers can benefit from the concession from that date onwards. Importantly, the TCO does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the TCO was registered. Importers, however, can apply for a refund of duty paid on goods imported since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations.