EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802090
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 Proprietary Limited applied for a TCO in respect of certain freezer bags on 06 February 2008.
Instrument
TCO No 0802090 was made on 23 April 2008. It declares that those certain freezer 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. 0802090 is taken to have come into force on 06 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. 0802090 was enacted in 2008 as a part of the Customs Act 1901, which governs the administration of customs and excise in Australia. The primary objective of this instrument was to address the issue of tariff concessions for specific goods, in this case, certain freezer bags, by providing a lower rate of customs duty. This initiative was undertaken by the Chief Executive Officer of Customs under the authority granted by the Act, with the aim of ensuring that such tariff concessions are only granted when there are no substitutable goods produced in Australia. The instrument was introduced following an application by Multix Proprietary Limited, and it became effective from the date of the application, 6 February 2008, with no adverse impact on the rights of any person other than the Commonwealth. This instrument exemplifies the legislative framework designed to provide economic benefits and facilitate trade by reducing import costs for specific goods.
Scope and Application
The Tariff Concession Instrument No. 0802090 under the Customs Act 1901 applies to the specific goods for which Multix Proprietary Limited applied for a Tariff Concession Order (TCO). This Act governs the process through which businesses can apply for and obtain tariff concessions on goods, thereby reducing the customs duty rate on those goods. The application of this legislation is limited to goods that are not specified as ineligible under section 269SJ of the Customs Act 1901 and must meet the core criteria outlined in sections 269C, 269D, and 269E. The Act applies at a national level, as it is a Commonwealth Act, and its jurisdiction extends across Australia. However, the application for a TCO and its subsequent approval are subject to certain exclusions, such as goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The application and approval process can also be extended or restricted through subordinate instruments, which provide further details on the specific requirements and procedures. The TCO does not impose any liabilities on any person, nor does it affect any rights as at the date of registration, thereby ensuring that the rights of importers are beneficially affected from the date the TCO is taken to have come into force.
Key Provisions
The main operative sections of the Customs Act 1901, as applied through Tariff Concession Order No. 0802090, provide for the process through which the Chief Executive Officer (CEO) of Customs can grant a tariff concession on certain goods. Section 269F allows an application to be made for a Tariff Concession Order (TCO), while section 269C sets out the core criteria that the CEO must be satisfied with before issuing a TCO. If the CEO determines that the application meets these criteria, they must issue a TCO as outlined in section 269P(3). In this case, the TCO, No. 0802090, was issued on 23 April 2008, for certain freezer bags, declaring that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, which reduces the duty from 5% to free.
The Customs Act 1901 imposes several obligations on the parties involved in the process of granting a TCO. The applicant, in this case Multix Proprietary Limited, must ensure their application is made in accordance with section 269F and meets the core criteria set out in section 269C. The CEO, on receiving a valid application, must publish a notice in the Gazette as per subsection 269K(1) and consider any submissions made in response to the notice. If no submissions are received, or if the CEO is satisfied with the application, they must issue a TCO as per section 269P(3). The CEO must also ensure that the TCO does not affect any rights of a person, other than the Commonwealth, as at the date of registration, as per subsection 269S(1).
Under the Customs Act 1901, there are potential consequences for non-compliance with the provisions of the Act, although specific offences and penalties are not outlined in the explanatory statement. Generally, non-compliance with customs regulations can result in civil or criminal penalties, depending on the nature and severity of the breach. Civil penalties can include fines, while criminal penalties can result in imprisonment. The maximum penalties would be determined by the specific breach and the relevant legislation. For TCOs, the primary consequences of non-compliance would be the failure to secure the tariff concession, potentially leading to higher customs duties being applied to the goods in question.