EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0836656
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.
Icb Pty Ltd applied for a TCO in respect of certain bin liners on 23 October 2008.
Instrument
TCO No 0836656 was made on 16 January 2009. It declares that those certain bin liners 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. 0836656 is taken to have come into force on 23 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 Tariff Concession Instrument No. 0836656, enacted under the Customs Act 1901, was introduced to address the need for a streamlined process for applying tariff concessions on specific goods, ensuring that businesses can benefit from reduced customs duty rates on goods that are not produced domestically and for which there are no substitutable goods available in the Australian market. This instrument was established to facilitate such applications and was enacted by the Chief Executive Officer of Customs following a valid application from Icb Pty Ltd for tariff concessions on certain bin liners. The instrument aims to provide a lower rate of customs duty on these goods, thus encouraging importation and potentially lowering costs for consumers. The policy objective is to support Australian businesses by ensuring they have access to competitively priced goods where no suitable local alternatives exist.
The instrument was developed in accordance with the legislative framework outlined in Part XVA of the Customs Act 1901, which empowers the CEO to make Tariff Concession Orders when certain criteria are met. The instrument came into force on 23 October 2008, the date the application was lodged, and does not impose any new liabilities or disadvantage any person's rights as of the date of registration. Instead, it provides a benefit to importers who can now apply for a refund of duty on goods imported since the effective date of the tariff concession.
Scope and Application
The Tariff Concession Order No. 0836656 under Part XVA of the Customs Act 1901 applies to the importation of certain bin liners, which are subject to a tariff concession, meaning that the applicable customs duty rate is reduced to free from the general rate of 5%. The Act allows the Chief Executive Officer of Customs to make such orders if specific conditions are met, notably that no substitutable goods are produced in Australia in the ordinary course of business. This particular order was made in response to an application by Icb Pty Ltd and was published in the Gazette, inviting any interested parties to lodge submissions, though none were received. The order came into force on the date the application was lodged, 23 October 2008, and it does not disadvantage any persons by affecting their rights as at the date of registration or imposing liabilities for actions prior to the registration. The order specifically benefits importers who can now apply for a refund of duty on the goods imported since the order's effective date. The scope of the Act is limited to the goods specified in the application and the conditions outlined in the relevant sections of the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0836656 under the Customs Act 1901 (section 269F) provide a framework for the Chief Executive Officer (CEO) of Customs to consider and make Tariff Concession Orders (TCO) for goods. When a person applies for a TCO (section 269F), the CEO must ensure that the goods are not specified in section 269SJ, which outlines goods ineligible for TCOs. The core criteria for approving a TCO application are established in sections 269C and 269P, where a TCO can be granted if no substitutable goods are produced in Australia on the date the application was lodged. Section 269P(3) mandates that a written order (TCO) must be made if these criteria are met, effectively reducing the duty on the specified goods.
The obligations under the Act primarily fall on the CEO of Customs, who must rigorously assess each TCO application against the core criteria. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting any objections to the proposed TCO. In this case, since no submissions were received, the TCO was made without any objections. Furthermore, the Act ensures that the TCO does not retroactively affect any rights or impose liabilities on parties other than the Commonwealth (subsection 269S(1)). This means that the rights of importers can be beneficially adjusted, allowing them to apply for duty refunds for goods imported since the TCO was deemed to have come into effect.
In terms of consequences for non-compliance, the Act does not explicitly detail criminal or civil penalties for breaches related to TCOs. However, it is likely that any improper application or fraudulent use of a TCO could lead to broader legal repercussions under the Customs Act 1901 and related regulations, which include provisions for fines and imprisonment for serious breaches of customs laws. The specific penalties would depend on the nature and severity of the breach, but they could range from financial penalties to criminal charges, depending on the context and the discretion of the courts.