EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618672
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.
Kencan Australasia Pty Ltd applied for a TCO in respect of certain disposable piping bags on 20 November 2006.
Instrument
TCO No 0618672 was made on 09 February 2007. It declares that those certain disposable piping bags 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. 0618672 is taken to have come into force on 20 November 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 Tariff Concession Instrument No. 0618672, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific imported goods to foster trade efficiency and economic benefits. This legislation was introduced to streamline the process for reducing customs duty on goods that do not have Australian substitutes, thereby encouraging imports and supporting industries that rely on such goods. The instrument was made by the Chief Executive Officer of Customs in response to an application by Kencan Australasia Pty Ltd for certain disposable piping bags, following the core criteria outlined in the Customs Act. The policy objective of this instrument is to ensure that no Australian-made substitutes exist for the goods in question, thus allowing for a tariff concession that provides economic relief to importers and potentially to consumers. The instrument came into effect on the date the application was lodged, aligning with the provisions of the Customs Act to avoid disadvantaging any party and ensuring a fair transition for all stakeholders involved.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty to certain goods. This applies to any person who submits an application for a TCO in respect of specific goods, provided that these goods are not listed in section 269SJ of the Act as ineligible for such concessions. The geographic reach of this legislation is national, as it applies across Australia. The application process requires that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. The application is subject to public consultation, as per section 269K(1) of the Act, although no submissions were received in response to the notice published in the Gazette. The TCO does not impose any liabilities on any person and does not disadvantage anyone who had rights as of the date of registration. Instead, it potentially benefits importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, as outlined in the Customs (Tariff) Regulations 1995. The CEO's decision to issue a TCO is not subject to any exclusions, exemptions, or thresholds outlined in the primary Act, but the scope of application may be further defined through subordinate instruments.
Key Provisions
The Customs Act 1901, particularly under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). An application for a TCO (Section 269F) can be submitted by any person seeking a concession on the customs duty for specific goods. If the CEO determines that the goods are not specified in Section 269SJ, they must then evaluate whether the application meets the core criteria (Section 269C). This assessment hinges on whether there are any substitutable goods produced in Australia on the day the application is lodged, with definitions provided for key terms like 'goods produced in Australia' (Section 269D), 'ordinary course of business' (Section 269E), and'substitutable goods' (Section 269D). If the application satisfies these criteria, the CEO is mandated to issue a written TCO (Section 269P(3)).
The obligations under this Act for the CEO include verifying the eligibility of TCO applications and ensuring that they meet the outlined criteria. This involves determining the production status of substitutable goods in Australia on the application date and publishing a notice in the Gazette inviting submissions from interested parties (Subsection 269K(1)). In the case of TCO No. 0618672, the CEO found no objections to the concession on disposable piping bags, as no submissions were received in response to the Gazette notice. The TCO becomes effective on the date the application is lodged (Subsection 269S(1)), and it does not retroactively affect the rights of any party, including the Commonwealth.
Breaching the conditions set out in the Customs Act 1901 can lead to legal consequences. While the specific penalties for non-compliance are not detailed in the explanatory statement, general provisions within the Act may include fines and imprisonment for serious breaches. Importers, however, may benefit from duty refunds for goods imported since the TCO's effective date under Regulation 126(1)(r). It is crucial for all parties involved to adhere to the Act's stipulations to avoid any potential penalties or civil consequences.