EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901589
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.
Pluspak Pty Ltd applied for a TCO in respect of certain bags on 19 January 2009.
Instrument
TCO No 0901589 was made on 14 April 2009. It declares that those certain 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. 0901589 is taken to have come into force on 19 January 2009.
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 Australian Parliament, establishes a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders, which can be applied for by individuals or entities, aim to provide a lower rate of customs duty on specified goods, provided certain criteria are met. The problem this legislation addresses is the need for a streamlined process to reduce customs duty on goods that are not produced domestically and do not have substitutable goods available in Australia. The policy objective is to facilitate trade by lowering the duty on imported goods that are essential but not produced locally. The Tariff Concession Instrument No. 0901589, made on 14 April 2009, exemplifies this process by granting free duty status to certain bags, which were not being produced in Australia and for which no substitutable goods existed, thereby benefiting importers who can now apply for duty refunds on these goods imported since the effective date of the order.
Scope and Application
The Customs Act 1901, as specified in Tariff Concession Instrument No. 0901589, outlines a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking tariff concessions on specific goods, ensuring that these goods are not produced in Australia in the ordinary course of business and do not have substitutable goods locally available. The geographic reach of this Act is national, with the concessions applying across Australia. The instrument extends the application of the Customs Act through subordinate legislation, specifically the Tariff Concession Orders, which are detailed in Schedule 4 of the Customs Tariff Act 1995. Notably, the Act does not disadvantage any person by affecting their rights as at the date of registration nor does it impose any new liabilities on individuals or entities. The commencement of a TCO is deemed to be effective from the date the application is lodged, thereby ensuring timely application of tariff concessions.
Key Provisions
The primary operative sections of this instrument are section 269F, which allows for applications for Tariff Concession Orders (TCOs), and section 269P, which governs the conditions under which a TCO can be made. Under section 269F, a person can apply to the Chief Executive Officer of Customs (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, and that the application meets the core criteria outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a TCO. The definitions in sections 269D, 269E, and 269F further explain the terms used in determining whether a TCO application meets the core criteria.
The obligations and requirements imposed by the Act on the parties and entities it governs include the necessity for applicants to ensure their applications for TCOs are not in respect of goods specified in section 269SJ, and that they meet the core criteria as per section 269C. The CEO has the obligation to assess applications against these criteria and, if satisfied, to make a TCO. Additionally, as per section 269K, the CEO must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made. The CEO must also ensure that the rights of any person, other than the Commonwealth, are not adversely affected by the TCO.
Any breach of the conditions set out in the Act could potentially lead to civil or criminal consequences. Although specific offences and penalties are not detailed in the explanatory statement, the general legal framework under the Customs Act 1901 could involve civil penalties for non-compliance, such as fines. If the breach is deemed to be more serious, it could potentially lead to criminal penalties, including imprisonment, although the maximum penalties are not specified in the explanatory statement. The rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. Importantly, the TCO does not impose any liabilities on any person.