EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802086
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.
Multix Pty Ltd applied for a TCO in respect of certain sandwich bags on 6 February 2008.
Instrument
TCO No 0802086 was made on 1 August 2008. It declares that those certain sandwich 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. One submission objecting to the TCO application was received from Aperio Group.
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. 0802086 is taken to have come into force on 6 February 2008.
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. 0802086, enacted in 2008, is an instrument under the Customs Act 1901 designed to facilitate the application of tariff concessions on specific goods. This instrument addresses the need for streamlined processes in granting tariff concessions for goods that are not produced domestically and for which there are no substitutable alternatives. The Customs Act 1901, as amended, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which reduce the customs duty on certain imported goods, provided they meet specific criteria. The policy objective of this instrument, as outlined in the explanatory statement, is to ensure that the tariff concessions do not disadvantage any existing rights holders and that importers can benefit from the reduced duty rates. This measure aims to support importers by reducing their duty liabilities and enhancing the competitiveness of imported goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0802086, made under the Customs Act 1901, applies to certain sandwich bags, specifically those for which Multix Pty Ltd applied for a Tariff Concession Order (TCO) on 6 February 2008. The instrument, which came into force on the same day as the application was lodged, is designed to provide relief from customs duty on these goods by declaring them to be subject to a specific item in Schedule 4 of the Customs Tariff Act 1995. The concession means that the general rate of duty, which is 5%, is reduced to free for these goods. This relief is contingent on the Chief Executive Officer of Customs being satisfied that no substitutable goods are produced in Australia, thereby meeting the core criteria outlined in the Customs Act. The application process involves public consultation, as mandated by the Act, which allows for objections to be raised and considered before a TCO is made. The TCO does not adversely affect the rights of any person other than the Commonwealth, and it does not impose any new liabilities on anyone.
Key Provisions
The Tariff Concession Instrument No. 0802086 under the Customs Act 1901 (section 269F) provides for the application of a lower rate of customs duty on certain goods, in this case, specific sandwich bags. The application for such a Tariff Concession Order (TCO) was made by Multix Pty Ltd on 6 February 2008, and the CEO of Customs determined that the application met the core criteria. Specifically, the CEO was satisfied that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO subsequently made a written order, TCO No. 0802086, on 1 August 2008, which declared that these sandwich bags are subject to a 5% duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995, although the TCO stipulates a free rate for these goods.
Entities and individuals affected by this TCO must adhere to the conditions and provisions set out within it. For instance, businesses that import these specific sandwich bags may now be eligible to apply for a refund of any duties paid after the date the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. Moreover, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO application. Although Aperio Group lodged an objection, the TCO still proceeded as determined by the CEO.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can result in various penalties. For instance, subsection 269S(1) indicates that a TCO is effective from the date the application was lodged. If any party fails to adhere to the terms of the TCO or violates any related provisions, they may face civil or criminal consequences. Although the specific penalties are not detailed in the explanatory statement, under Australian law, breaches of customs regulations can result in fines, imprisonment, or both, depending on the severity and nature of the breach. The precise penalties would be determined by the courts in the context of any proceedings brought under the Customs Act 1901.