EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804311
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.
Eastern Ocean Pty Ltd applied for a TCO in respect of certain polystyrene tableware on 16 April 2008.
Instrument
TCO No 0804311 was made on 04 July 2008. It declares that those certain polystyrene tablewares 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. 0804311 is taken to have come into force on 16 April 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, as amended, provides a framework for the application of Tariff Concession Orders (TCOs) which reduce the customs duty on certain imported goods. Enacted by the Australian Parliament, the Act aims to ensure that Australia's trade policies support economic growth by reducing the cost of imported goods that do not have local substitutes. The explanatory statement for Tariff Concession Instrument No. 0804311, made on 4 July 2008, outlines the process undertaken by the Chief Executive Officer of Customs in response to an application from Eastern Ocean Pty Ltd for a TCO on certain polystyrene tableware. The policy objective, as set out in the Act, is to facilitate the import of goods that do not have locally produced alternatives, thus encouraging trade and potentially lowering consumer prices. The instrument was effective from the date of the application, 16 April 2008, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0804311 under the Customs Act 1901 applies to goods specified in the instrument, namely certain polystyrene tablewares, and is applicable to entities or persons importing these goods into Australia. The instrument operates under the authority granted by section 269F of the Customs Act 1901, which allows for the application of tariff concessions by the Chief Executive Officer of Customs. The Act applies across the Commonwealth of Australia, and the instrument was made effective from 16 April 2008, the date the application was lodged. Importantly, the instrument does not affect any existing rights or liabilities of persons other than the Commonwealth and does not impose new liabilities on any person. The instrument allows for a refund of duty on the specified goods for importers, as per paragraph 126(1)(r) of the Regulations. The scope of the Act can be extended or modified through subordinate instruments, which can further specify the goods or conditions under which tariff concessions apply.
Key Provisions
The Customs Act 1901, through its Part XVA, provides a mechanism for Tariff Concession Orders (TCOs) that can be applied for and granted by the Chief Executive Officer of Customs (CEO) under certain conditions (sections 269F, 269C, and 269SJ). For instance, section 269C stipulates that a TCO can be granted if no substitutable goods are produced in Australia at the time the application is lodged. An application for a TCO is made by a person who wishes to have a lower rate of customs duty applied to specific goods, as detailed in section 269F. If the CEO determines that the application meets the core criteria and is not for goods specified in section 269SJ, they must then issue a written order declaring that the goods are subject to a prescribed rate of duty, as outlined in section 269P(3).
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that their application is valid and meets the core criteria as per sections 269C and 269SJ, meaning they must demonstrate that no substitutable goods are produced in Australia at the time of the application. The CEO, on the other hand, must review the application, decide if it meets the criteria, and if so, make the TCO. Furthermore, under section 269K(1), the CEO must also publish a notice in the Gazette inviting submissions from any interested parties and consider them before making a decision.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. For instance, if a TCO is granted inappropriately, the CEO may face scrutiny or legal challenges. Additionally, any person who fails to adhere to the terms of the TCO or who knowingly contravenes the Act may face penalties. While the explanatory statement does not explicitly detail the penalties for breach, it is common for breaches of customs regulations to incur fines or other penalties as prescribed by the relevant legislation. The specific penalties would depend on the nature and severity of the breach.