EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0808177
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.
Easyware Products Pty Limited applied for a TCO in respect of certain plastic bag closure grips on 15 May 2008.
Instrument
TCO No 0808177 was made on 01 August 2008. It declares that those certain plastic bag closure grips 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. 0808177
is taken to have come into force on 15 May 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. 0808177, enacted under the Customs Act 1901, was introduced to address the need for providing tariff concessions on certain goods, in this instance, plastic bag closure grips. The Customs Act 1901, enacted by the Australian Parliament, provides the framework for the administration of customs and excise duties, including the establishment of a process for tariff concession orders (TCOs) that can reduce or eliminate customs duty on specific goods. The policy objective behind the creation of TCOs is to support Australian industries by making imported goods more competitively priced, thus potentially encouraging their use over locally produced alternatives that might be more expensive. In the case of TCO No. 0808177, the application by Easyware Products Pty Limited was approved as the CEO of Customs determined that no substitutable goods were produced in Australia, aligning with the criteria set out in the Customs Act. The tariff rate for these grips was thus reduced from the general rate of 5% to free, effective from the date the application was lodged, 15 May 2008.
Scope and Application
The Tariff Concession Order No. 0808177, made under section 269F of the Customs Act 1901, applies to specific plastic bag closure grips which are now subject to a concessional tariff rate, bringing the rate of duty down to free from the general rate of 5%. The application for this concession was made by Easyware Products Pty Limited on 15 May 2008, and the order was made by the Chief Executive Officer of Customs on 1 August 2008 after it was determined that no substitutable goods were produced in Australia. This order benefits importers of these goods by allowing them to apply for a refund of duty on goods imported since the effective date of the concession, which is the date the application was lodged. The TCO does not affect any pre-existing rights or impose any new liabilities on persons other than the Commonwealth. The order's geographic reach is national, as it applies across Australia, and there are no exclusions or exemptions specified within this particular TCO, although broader exclusions may apply as outlined in section 269SJ of the Customs Act 1901.
Key Provisions
Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) regarding specific goods. If the application is not for goods outlined in section 269SJ, which are ineligible for a TCO, the CEO must determine whether the application satisfies the core criteria set forth in section 269C. This criterion includes ensuring that, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO confirms the application meets the core criteria, a written order, or TCO, is issued under section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods.
The obligations imposed by the Customs Act 1901 on the CEO include assessing the validity of a TCO application, determining whether the core criteria are met, and publishing a notice in the Gazette to invite submissions if the application is deemed valid. For the applicant, the primary obligation is to ensure the application is for goods that are eligible under the Act and to provide any necessary information to satisfy the CEO that the core criteria are met. Additionally, the CEO is required to ensure that no submissions are received that would warrant reconsideration of the TCO decision.
Breaching the obligations set out in the Customs Act 1901 may result in civil or criminal penalties, depending on the nature and severity of the breach. For instance, providing false information in a TCO application could be considered a misleading or deceptive conduct under Australian Consumer Law, leading to potential civil penalties. The maximum penalty for such offences could be significant, including fines and imprisonment, depending on the jurisdiction and specific provisions of the law. Additionally, any failure to comply with the notice publication requirement or other procedural obligations could result in administrative penalties or legal challenges regarding the validity of the TCO itself.