EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716337
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.
Kimberly Clark Australia Pty Ltd applied for a TCO in respect of certain disposable pants on 26 September 2007.
Instrument
TCO No 0716337 was made on 07 December 2007. It declares that those certain disposable pants 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. 0716337 is taken to have come into force on 26 September 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 Australian Parliament, provides a framework for the imposition of customs duties on imported goods. It establishes a process through which Tariff Concession Orders (TCOs) may be issued to reduce or eliminate customs duty on specific goods. This scheme was introduced to address the problem of ensuring fair and efficient trade practices by potentially lowering the cost of imported goods for consumers. The Tariff Concession Instrument No. 0716337 was introduced to provide a tariff concession for certain disposable pants, reducing the customs duty from 5% to free. The decision to issue this TCO was made by the Chief Executive Officer of Customs, who was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. The instrument came into force on the date the application was lodged, 26 September 2007, and does not disadvantage any person or impose liabilities on anyone other than the Commonwealth.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to reduce the rate of customs duty on specified goods. This legislation applies to any person or entity that wishes to apply for a TCO for goods that are not specified in section 269SJ of the Act, which includes goods that are not eligible for tariff concessions. The process involves an application to the CEO, who must determine if the application meets the core criteria set out in section 269C, which includes the condition that no substitutable goods were produced in Australia in the ordinary course of business. If the application is successful, a TCO is issued, granting the applicant tariff concessions on the specified goods. The TCO's jurisdiction extends to the entire Commonwealth of Australia, and it affects the rights of importers by enabling them to apply for a refund of duty on goods imported since the TCO came into force. The TCO does not impose any liabilities on any person other than the Commonwealth and does not disadvantage any person's rights as at the date of registration.
Key Provisions
The main operative sections of the Customs Act 1901 that are pertinent to Tariff Concession Orders (TCOs) include sections 269C, 269F, 269P, and 269S. Section 269F allows for the application to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. If the CEO is satisfied that the application meets the core criteria, they must make a written order under section 269P(3) declaring the goods to which the concession applies. Section 269C outlines the criteria that must be met for an application to be considered valid, particularly focusing on the absence of substitutable goods produced in Australia. Furthermore, section 269S specifies that a TCO comes into effect on the date the application is lodged. This means that any applicable tariffs are adjusted retroactively from the date of the application.
The Act imposes several obligations on both applicants and the CEO of Customs. For applicants, the primary requirement is to submit a valid application to the CEO, ensuring that it pertains to goods not specified in section 269SJ of the Act and meets the core criteria outlined in section 269C. The CEO, on the other hand, must promptly review the application and decide whether it meets the criteria for a TCO. If satisfied, the CEO is mandated to issue a written order as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO. This ensures transparency and allows for any relevant submissions to be considered before a decision is finalised.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in various consequences. While the explanatory statement does not detail specific offences or penalties, breaches of the Act generally could lead to civil or criminal sanctions depending on the nature and severity of the violation. Penalties could include fines or other civil remedies for non-compliance, and in more severe cases, criminal charges could be pursued against individuals or entities that deliberately flout the provisions of the Act. The exact penalties would be determined based on the specific circumstances and the relevant sections of the Act or associated regulations that are breached.