EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902309
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.
Alive Packaging applied for a TCO in respect of certain bags on 22 January 2009.
Instrument
TCO No 0902309 was made on 17 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. 0902309 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0902309, enacted under the Customs Act 1901, addresses the problem of ensuring that specific goods, in this case certain bags, receive appropriate tariff concessions to promote trade and economic benefits. This legislation was introduced by the Chief Executive Officer of Customs (CEO) in response to an application from Alive Packaging, who sought a tariff concession order (TCO) for their goods. The primary policy objective is to provide tariff relief to imported goods that have no substitutable Australian-produced alternatives, thus facilitating lower customs duties and potentially boosting trade for the applicant.
The instrument was enacted following the CEO's satisfaction that the application met the core criteria outlined in the Customs Act 1901, specifically that no substitutable goods were produced in Australia at the time of the application. As a result, the TCO No. 0902309 was made, granting the specified bags a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, effective from 22 January 2009. This legislative action does not disadvantage any existing rights of non-Commonwealth persons and allows for duty refunds for importers of the specified goods.
Scope and Application
The Tariff Concession Instrument No. 0902309 applies to specific goods that are the subject of a Tariff Concession Order (TCO), which is made under Part XVA of the Customs Act 1901. The Act pertains to the process by which a person can apply for a TCO from the Chief Executive Officer of Customs (the CEO) to obtain a lower rate of customs duty on certain goods. This Act is applicable to any individual or entity seeking tariff concessions for goods that are not specified as ineligible under section 269SJ of the Act. The geographic reach of the Act is national, as it applies to the importation of goods into Australia. The Act does not specify any exclusions or exemptions; however, the CEO has the discretion to refuse a TCO application if it pertains to goods specified in section 269SJ of the Act. The application of the Act may be extended or restricted through subordinate instruments, such as regulations, which could provide further detail on the application process and eligibility criteria for TCOs.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0902309 under the Customs Act 1901 (section 269F) allow for the application of a Tariff Concession Order (TCO) by any person for goods, provided the goods do not fall under the prohibited category specified in section 269SJ. If the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the core criteria (sections 269C and 269P(3)), they must issue a TCO. The CEO must also ensure that no substitutable goods, as defined in section 269D, are produced in Australia in the ordinary course of business on the day the application was lodged. In this case, the TCO applies to certain bags, and it specifies that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively reducing the duty rate from 5% to free.
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for any person wishing to apply for a TCO to submit a valid application to the CEO (section 269F). The CEO must then assess whether the application meets the core criteria, which involves determining if any substitutable goods were produced in Australia on the day the application was lodged (section 269C). If the CEO determines that the criteria are met, they must issue a written TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit their views on why the TCO should not be made (subsection 269K(1)). The TCO does not affect the rights of any person except the Commonwealth, as outlined in subsection 269S(1).
Under the Customs Act 1901, breaches of the provisions regarding TCOs could potentially lead to civil or criminal consequences, although specific offences and penalties are not detailed in the explanatory statement. The Act and related regulations would need to be consulted to determine the exact nature of any penalties for non-compliance. However, the explanatory statement does clarify that the TCO does not impose any liabilities on any person and protects the rights of importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. This ensures that the rights of importers are beneficially affected without any imposition of new liabilities.