EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802638
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 0802638 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. Four submissions objecting to the TCO application was received from Andrew Kohn Pty Ltd, Aperio Group Pty Ltd, Detmark Polybags 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. 0802638 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 Customs Act 1901, enacted by the Australian Parliament, serves as the foundational statute governing customs and border control within Australia. A significant aspect of this Act is the establishment of the Tariff Concession Orders (TCO) scheme, introduced to provide relief and flexibility in the application of customs duties. This scheme, under Part XVA of the Act, allows the Chief Executive Officer of Customs to reduce or eliminate customs duties on certain goods through TCOs, subject to specific criteria. The explanatory statement for Tariff Concession Instrument No. 0802638, enacted in 2008, illustrates this process by detailing the application and approval of a TCO for certain drawtape or drawtight bags, reducing their duty rate from 5% to free, based on the absence of substitutable goods produced in Australia. The policy objective behind such concessions is to foster competitive market conditions, support industry growth, and potentially enhance consumer benefits by lowering the cost of imported goods.
Scope and Application
The Tariff Concession Instrument No. 0802638 under the Customs Act 1901 applies specifically to certain drawtape or drawtight bags that are subject to a Tariff Concession Order (TCO) made by the Chief Executive Officer of Customs (the CEO). This instrument serves to provide a lower rate of customs duty on these goods, which is free of charge as opposed to the general rate of 5%. The instrument is applicable to the entities or individuals importing these specific drawtape or drawtight bags into Australia. It is part of a broader scheme under Part XVA of the Customs Act 1901 that allows for tariff concessions on goods, provided that certain criteria are met, such as the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth and allows importers to apply for a refund of duty on goods imported since the TCO came into force. This instrument has a national reach within Australia, as it is governed by Commonwealth legislation.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0802638 under the Customs Act 1901 (section 269F) establish a mechanism for the Chief Executive Officer (CEO) of Customs to grant tariff concessions on certain goods, as long as the application does not pertain to goods specified in section 269SJ, which are ineligible for such concessions. When the CEO receives an application for a Tariff Concession Order (TCO), they must determine whether it meets the core criteria outlined in section 269C. This involves ensuring that on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P(3) respectively. If the CEO confirms that the application satisfies these criteria, they must issue a written TCO.
The obligations imposed by this Act on the parties involved are primarily administrative and procedural. The CEO of Customs is responsible for assessing TCO applications to ensure they meet the specified criteria, and making a written order if they do. Multix Pty Ltd, as the applicant, must provide all necessary information and evidence to support their application. Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette (subsection 269K(1)), inviting any objections from interested parties. In this case, submissions were received from Andrew Kohn Pty Ltd, Aperio Group Pty Ltd, Detmark Polybags Pty Ltd, and J Sandler Pty Ltd.
Under the Customs Act 1901, any breach of the requirements or obligations stipulated in the Act could potentially lead to civil or criminal consequences. However, the explanatory statement does not detail specific offences or penalties for failing to comply with the provisions of the TCO. It is clear, however, that the TCO does not disadvantage any person (other than the Commonwealth) by affecting their rights as at the date of registration or imposing liabilities for actions taken before the date of registration. Importers, in particular, will benefit from the ability to apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.