EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0613749
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.
Valiant Enterprises Pty Ltd applied for a TCO in respect of certain disposable nappy receptacles on 22 August 2006.
Instrument
TCO No 0613749 was made on 10 November 2006. It declares that those certain disposable nappy receptacles 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 0%.
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. 0613749 is taken to have come into force on 22 August 2006.
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 for the regulation of customs duties and tariffs. Part XVA of the Act introduces a scheme allowing the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which apply lower rates of customs duty on specified goods. The Tariff Concession Instrument No. 0613749, introduced on 10 November 2006, addresses the need to provide relief from customs duty on certain goods when no suitable substitutes are produced in Australia. The specific instrument in question concerns disposable nappy receptacles, reducing the duty rate from 5% to 0%, effective from the date the application was lodged, 22 August 2006. The instrument was made following a valid application from Valiant Enterprises Pty Ltd, with no objections received from interested parties, thereby ensuring that the policy objective of providing tariff relief is met without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking to import goods that can benefit from a lower rate of customs duty, provided the goods meet the criteria outlined in the Act. The scope of this Act extends nationally, as it is a Commonwealth legislation, thereby encompassing all states and territories within Australia. However, it excludes certain goods specified in section 269SJ, which cannot be subject to a TCO. The Act allows for the possibility of further defining its application through subordinate instruments, although this specific explanatory statement does not elaborate on such provisions. The geographic reach is thus federal, ensuring uniform application across the country. The TCO in question, No. 0613749, specifically pertains to certain disposable nappy receptacles, reducing their duty rate from 5% to 0%, and it came into effect on the date of the application, 22 August 2006, without retroactive implications or liabilities for importers.
Key Provisions
The key operative sections of this Tariff Concession Instrument (TCO) are found within Part XVA of the Customs Act 1901. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO is satisfied that the application is valid and does not pertain to goods that are explicitly excluded under section 269SJ, they must determine whether the application meets the core criteria outlined in section 269C. If the CEO is satisfied that the core criteria are met, they are required under section 269P(3) to make a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This declaration effectively reduces the customs duty rate on these goods.
The obligations and requirements imposed by the Act on the parties involved are primarily centered around the application process for a TCO. The applicant must ensure that their application is valid and pertains to goods that are not excluded under section 269SJ of the Act. The CEO is obligated to assess the application against the core criteria, which include verifying that no substitutable goods are produced in Australia on the day the application was lodged, as defined in section 269D. If the CEO determines that the application meets the criteria, they must issue a TCO and publish a notice in the Gazette inviting any interested parties to lodge submissions. In this case, no submissions were received.
In terms of the consequences of non-compliance, section 269K(1) of the Act requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made. However, there are no specific offences, penalties, or consequences outlined in the explanatory statement for breach of the TCO provisions. The Act and the accompanying regulations do not detail specific penalties for non-compliance with TCO requirements, but general breaches of the Customs Act 1901 can result in civil or criminal penalties. Civil penalties can include fines, and criminal penalties can include imprisonment, depending on the severity of the breach. The TCO itself does not impose any liabilities on any person, ensuring that the rights of importers are beneficially affected, and they may apply for a refund of duty on goods imported since the TCO came into force.