EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802635
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 drawtape or drawtight bags on 14 February 2008.
Instrument
TCO No 0802635 was made on 13 June 2008. It declares that those certain drawtape or drawtight 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. Three submissions objecting to the TCO application was received from Andrew Kohn Pty Ltd, Aperio Group Pty Ltd and J Sandler Pty Ltd.
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. 0802635 is taken to have come into force on 14 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. 0802635, made under the Customs Act 1901, addresses the need for tariff concessions on specific goods, facilitating trade by reducing or eliminating customs duties. Enacted in 2008, this instrument was introduced to provide tariff concessions for certain drawtape or drawtight bags, aiming to support Australian businesses by lowering the cost of importing these goods. The instrument was developed in response to an application from Multix Pty Ltd, who sought a tariff concession as no substitutable goods were produced in Australia. The Chief Executive Officer of Customs, after reviewing the application and considering objections from other entities, determined that the application met the core criteria, leading to the issuance of the tariff concession which set the duty rate at free. This legislative action ensures that the rights of importers are protected, allowing them to apply for duty refunds on goods imported since the concession came into effect.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to individuals or entities seeking a concession on customs duty for certain goods by applying for a TCO. The process begins when an applicant submits an application to the CEO, who then evaluates whether the application meets the core criteria stipulated in the Act. Notably, a TCO may be granted if no substitutable goods are produced in Australia in the ordinary course of business, and the goods in question do not fall under the exclusions listed in section 269SJ of the Act. The instrument is applicable nationwide as it falls under Commonwealth jurisdiction, thereby affecting importers across Australia. TCO No. 0802635, for instance, was issued on 13 June 2008 for certain drawtape or drawtight bags, reducing their customs duty rate from 5% to free. The commencement of a TCO is deemed to be the day on which the application is lodged, and it does not retroactively disadvantage any person or impose liabilities for actions taken before the registration date, thereby safeguarding the rights of existing stakeholders.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0802635, under the Customs Act 1901, pertain to the establishment and implementation of a Tariff Concession Order (TCO) for certain drawtape or drawtight bags. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods do not fall under the categories specified in section 269SJ. If the application is deemed valid, the CEO must determine whether it meets the core criteria outlined in sections 269C, 269B, and 269D. Upon meeting these criteria, the CEO must issue a written TCO as per section 269P(3). This particular TCO, No. 0802635, was made on 13 June 2008, and it declares that certain drawtape or drawtight bags are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, the applicant, in this case, Multix Pty Ltd, must ensure their application for a TCO is valid and meets the core criteria as stipulated by the Act. Secondly, the CEO must diligently review the application and any objections received, and make a decision based on the merits and compliance with the legislative requirements. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1). The CEO must consider these submissions before deciding on the TCO.
Failure to comply with the provisions of the Customs Act 1901 can result in legal consequences. Although the Explanatory Statement does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches, it is clear that non-compliance could lead to legal action. For instance, if an applicant submits a fraudulent application or if the CEO fails to properly review and process a valid application, both parties could face legal repercussions. Such consequences might include fines, penalties, or other legal actions as determined by the relevant authorities under Australian law. The precise penalties would be governed by the broader provisions of the Customs Act 1901 and related legislation.