EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704145
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.
Michael J Bowen & Assoc Pty Ltd applied for a TCO in respect of certain non stick baking and cooking paper on 15 March 2007.
Instrument
TCO No 0704145 was made on 8 June 2007. It declares that those certain non stick baking and cooking paper 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. 0704145 is taken to have come into force on 15 March 2007.
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 Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) may be issued to reduce the customs duty on certain goods. This mechanism was introduced to address the issue of ensuring fair and competitive trade practices by providing tariff concessions to goods that are not produced in Australia or for which no suitable Australian-made substitutes exist. The Tariff Concession Instrument No. 0704145, made under the authority of the Customs Act 1901, grants a tariff concession for certain non-stick baking and cooking paper, reducing the duty rate from 5% to 0%. The policy objective is to facilitate access to competitively priced goods that are not domestically produced, thereby benefiting consumers and potentially encouraging further domestic production in the future. The instrument came into force on 15 March 2007, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0704145, established under the Customs Act 1901, pertains to the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The Act applies to individuals or entities seeking to import goods eligible for tariff concessions, provided these goods are not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The core criteria for approval of a TCO application, as set out in section 269C, require that no substitutable goods were produced in Australia at the time of the application. This Act operates on a Commonwealth level, with its provisions extending across Australia. There are no stated exclusions or thresholds within the provided text, but the CEO's satisfaction with the core criteria is pivotal in determining eligibility. The Act allows for further specifications and conditions through subordinate instruments, which may include regulations and orders to clarify or expand on the application process and eligibility criteria.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0704145 are sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901, which collectively set out the criteria and process for making a Tariff Concession Order (TCO). Under section 269C, a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms "goods produced in Australia," "ordinary course of business," and "substitutable goods" are further defined by sections 269B, 269D, and 269E. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must make a written order under section 269P(3) declaring the goods to which the TCO applies. In this instance, the CEO made TCO No. 0704145 for certain non-stick baking and cooking paper, declaring them to be goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of 0%.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. For the applicant, such as Michael J Bowen & Assoc Pty Ltd, the obligation is to ensure their application meets the core criteria as defined by sections 269C, 269B, 269D, and 269E. The CEO is required to evaluate the application against these criteria and, if satisfied, make a TCO. The CEO must also publish a notice in the Gazette under subsection 269K(1) inviting submissions from any interested parties who believe the TCO should not be made. In this case, the CEO did not receive any submissions. Additionally, the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Breach of the obligations and requirements outlined in the Customs Act 1901 can lead to various consequences. However, the explanatory statement does not explicitly detail offences or penalties for non-compliance. Generally, failure to meet the criteria for a TCO could result in the CEO denying the application, which could be challenged in court. The Act and associated regulations may also provide for other penalties for non-compliance, but these are not specified in the explanatory statement. The focus here is on ensuring that the TCO process is transparent and that any potential objections are considered before a concession is granted.