EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0839657
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.
McPhersons Consumer Products applied for a TCO in respect of certain plastic tableware and / or kitchenware on 12 November 2008.
Instrument
TCO No 0839657 was made on 06 March 2009. It declares that those certain plastic tableware and / or kitchenware 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. 0839657 is taken to have come into force on 12 November 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. 0839657 was enacted under the Customs Act 1901 to address the issue of providing tariff concessions for certain goods, specifically plastic tableware and kitchenware, which were subject to customs duty. This instrument was introduced to facilitate lower duty rates on these goods, thereby encouraging their import into Australia. The Chief Executive Officer of Customs (CEO) is the enacting body, empowered under section 269F of the Customs Act 1901 to make Tariff Concession Orders (TCOs). The policy objective is to ensure that such concessions are granted only if no substitutable goods are produced in Australia, as stipulated in section 269C of the Act. The TCO was implemented to provide a zero percent duty rate on the specified plastic tableware and kitchenware, which contrasts with the general 5 percent duty rate. The instrument came into force on 12 November 2008, the date the application was lodged, and does not affect the rights of any person other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0839657, made under the Customs Act 1901, applies to the specific goods of certain plastic tableware and kitchenware as submitted by McPhersons Consumer Products. This legislation is relevant to those involved in the importation of these goods, particularly importers who would benefit from the reduction of customs duty from 5% to free, provided no substitutable goods are produced in Australia. The instrument was implemented to facilitate a lower tariff rate for these goods, thereby potentially increasing their affordability and availability in the Australian market. The instrument's application is national, given it is enacted under the Commonwealth Customs Act 1901, and it does not apply to any goods specified in section 269SJ of the Act which are ineligible for tariff concessions. The instrument's scope extends to any person or entity importing the specified goods, and it does not retroactively affect the rights or liabilities of any parties except for potentially benefiting importers who can apply for duty refunds for goods imported since the effective date of 12 November 2008.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0839657 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer (CEO) of Customs to make a written order if satisfied that an application for a Tariff Concession Order (TCO) meets the core criteria. This order then declares that certain specified goods are subject to a lower rate of customs duty, in this case, free duty for certain plastic tableware and kitchenware. The core criteria, outlined in section 269C, must be met by ensuring no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged (section 269B and 269E). The CEO must also publish a notice in the Gazette, inviting submissions from any person who considers the TCO should not be made (section 269K(1)).
Obligations imposed on parties or entities governed by this Act include the requirement for applicants, such as McPhersons Consumer Products, to ensure their applications meet the core criteria, including proving that no substitutable goods are produced in Australia. The CEO is obligated to make a written order if the application meets these criteria, and to publish a notice in the Gazette, inviting submissions from the public. Importers of the specified goods are required to apply for a refund of duty on goods imported since the TCO is taken to have come into force.
Any breach of the provisions of this Act, including failure to comply with the obligations to submit a valid application, publish notices, or to meet the core criteria, could result in civil or criminal consequences. The maximum penalties for breaches of the Customs Act 1901 can include fines and imprisonment, depending on the severity of the breach. The specifics of these penalties are not detailed in the explanatory statement but are generally aligned with the penalties outlined in the broader Customs Act framework.