EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835959
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.
Aperio Group Pty Ltd applied for a TCO in respect of certain woven polypropylene bags on 17 October 2008.
Instrument
TCO No 0835959 was made on 14 January 2009. It declares that those certain woven polypropylene 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. 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. 0835959 is taken to have come into force on 17 October 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 by Tariff Concession Instrument No. 0835959 enacted in 2009, addresses the issue of ensuring that Australia’s customs duty rates are competitive and fair for importers by providing tariff concessions on certain goods. This instrument was introduced to provide tariff relief for specific goods where it was determined that no substitutable products were produced in Australia. The Tariff Concession Order (TCO) in question, TCO No. 0835959, was made by the Chief Executive Officer of Customs following an application by Aperio Group Pty Ltd for tariff concessions on certain woven polypropylene bags. The policy objective was to reduce the duty on these goods from the general rate of 5% to free, effective from the date the application was lodged, 17 October 2008. This was achieved by declaring that the goods in question were subject to a specified item in the Customs Tariff, thereby providing a financial benefit to importers without imposing any liabilities on other parties.
Scope and Application
The Tariff Concession Instrument No. 0835959 under the Customs Act 1901 applies to certain woven polypropylene bags and operates within the framework set by the Act. The instrument was made by the Chief Executive Officer of Customs (CEO) after Aperio Group Pty Ltd applied for a tariff concession order (TCO) for these goods on 17 October 2008. The CEO determined that the application met the core criteria, as no substitutable goods were produced in Australia at the time the application was lodged. Consequently, the CEO made the TCO on 14 January 2009, declaring that the specified goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, granting them a free rate of duty instead of the general rate of 5%. The TCO applies nationally and affects the rights of importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date. However, it does not disadvantage or impose liabilities on any person in respect of actions taken before the TCO's registration. The CEO published a notice in the Gazette inviting submissions against the TCO, but no submissions were received.
Key Provisions
The Tariff Concession Order (TCO) No. 0835959, issued under section 269F of the Customs Act 1901, establishes a tariff concession for certain woven polypropylene bags, specifically those that were the subject of an application by Aperio Group Pty Ltd. The key provision of this TCO, as outlined in section 269P(3), is that the CEO of Customs must make a written order declaring that these particular goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively reducing their duty from the general rate of 5% to free. This concession is contingent on the CEO being satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as required by section 269C. The TCO also stipulates that it comes into force on the day the application was lodged, 17 October 2008, as per subsection 269S(1).
In terms of obligations, the Act imposes several duties on the CEO and other entities. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting the TCO application as valid, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. In this instance, the CEO did not receive any submissions in response to the published notice. Additionally, the Act ensures that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration so as to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration. This means that the rights of importers will be beneficially affected, and they can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
The Act does not explicitly outline specific offences, penalties, or consequences for breaches related to the TCO. However, general compliance with the Customs Act 1901 and its associated regulations is crucial. Failure to comply with the terms of the TCO or any related requirements could potentially lead to civil or criminal consequences under the broader framework of the Customs Act, including potential fines or imprisonment. The exact penalties would depend on the nature and severity of the breach, as detailed in other sections of the Act and its subsidiary legislation.