EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0812847
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.
Visy Industries applied for a TCO in respect of certain drinking straws on 16 June 2008.
Instrument
TCO No 0812847 was made on 22 August 2008. It declares that those certain drinking straws 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. 0812847 is taken to have come into force on 16 June 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 Commonwealth Parliament, governs the regulation of customs and excise in Australia. Part XVA of the Act provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These TCOs allow for the application of lower customs duty rates to specific goods. The purpose of this legislation is to provide relief to Australian importers by reducing the duty on certain goods, thereby making them more affordable and competitive. This was particularly important to address market gaps where no domestic substitutes were available. The Tariff Concession Instrument No. 0812847, issued in 2008, exemplifies this process by granting free duty on certain drinking straws, as no substitutable goods were produced in Australia at the time of the application. The policy objective here was to ensure that the rights of importers are not disadvantaged and that the TCOs provide a clear benefit by lowering the duty rates for specific imported goods.
Scope and Application
The Customs Act 1901, as amended, encompasses the scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation applies to goods specified in an application for a TCO, provided the goods are not listed in section 269SJ of the Act, which includes items that cannot be subject to a TCO. The process is initiated when a person applies to the CEO for a TCO, and the CEO evaluates whether the application meets the core criteria outlined in section 269C. Specifically, the CEO must determine if no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the criteria are met, the CEO issues a written TCO, applying a prescribed item of Schedule 4 to the Customs Tariff Act 1995 to the specified goods. The geographic and jurisdictional reach of this Act is national, affecting the importation of goods across Australia. The TCO itself does not retroactively affect the rights of any person or impose liabilities, although it does allow for duty refunds for importers of the specified goods since the effective date of the TCO.
Key Provisions
The primary operative sections of this legislation, particularly section 269C and 269F of the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. Section 269C sets the core criteria for the CEO's consideration, which includes whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order, a TCO, as per section 269P(3).
The Act imposes several obligations on the parties it governs. The CEO must ensure that the application is not in respect of goods specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO also has a duty to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1). Additionally, under section 269S(1), the TCO is considered to have come into force on the day the application for the TCO was lodged, which in this case is 16 June 2008.
Failure to comply with the provisions of the Customs Act 1901 may result in various civil or criminal consequences. For example, any person who makes a false statement in an application for a TCO could face penalties under section 269M. The maximum penalty for such an offence is 12 months imprisonment or a fine of 10,000 penalty units, or both, according to the Act. Additionally, any individual or entity found to have contravened the Act may face further administrative or legal action, which could include fines or other civil penalties as determined by the courts.