EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905247
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.
Dalton Packaging applied for a TCO in respect of certain self adhesive tape on 16 February 2009.
Instrument
TCO No 0905247 was made on 15 May 2009. It declares that those certain self adhesive tape 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. 0905247 is taken to have come into force on 16 February 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. 0905247 was enacted under the Customs Act 1901 to address the issue of reducing customs duties for certain self-adhesive tape imported into Australia. This legislative instrument was introduced to provide a tariff concession for Dalton Packaging's specific application, which was lodged on 16 February 2009. The instrument was approved and made by the Chief Executive Officer of Customs on 15 May 2009, following the determination that no substitutable goods were produced in Australia at the time of the application. The policy objective was to ensure that the application of the tariff concession does not disadvantage any person and does not impose any new liabilities, while benefiting importers by potentially allowing them to claim refunds on duties paid prior to the concession's effective date. The instrument came into force on the day the application was lodged, as per the provisions of the Customs Act.
Scope and Application
The Customs Act 1901, as amended, provides for the creation of Tariff Concession Orders (TCOs) which apply a lower rate of customs duty on specified goods. This legislation applies to entities and individuals who import goods into Australia, specifically those who can demonstrate that the goods they import are not substitutable with goods produced domestically. The application and effect of a TCO is governed by Part XVA of the Act, with the Chief Executive Officer of Customs (CEO) having the authority to make such orders. The application process requires that the CEO must first determine that the goods in question are not prohibited under section 269SJ of the Act and that no substitutable goods are produced in Australia, as defined by sections 269D, 269E and 269F. This instrument applies on a national level within Australia and operates to provide relief to importers who can demonstrate that there are no domestic alternatives to the goods they wish to import. The TCO does not disadvantage any person or impose liabilities on anyone in respect of anything done or omitted before the TCO was registered. In the case of TCO No. 0905247, certain self-adhesive tape is subject to a zero rate of duty as of 16 February 2009, the date the application was lodged.
Key Provisions
The main operative sections of the Customs Act 1901 (section 269C) establish that a Tariff Concession Order (TCO) application meets the core criteria if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. Section 269P(3) then requires the Chief Executive Officer (CEO) of Customs to issue a written TCO if the application meets these criteria. The Explanatory Statement details that the CEO must declare that the specified goods are subject to a prescribed tariff item, in this case, item 50 of Schedule 4 to the Customs Tariff Act 1995. This results in a duty rate of free, down from the general rate of 5% (section 269F).
The Act imposes several obligations on the parties involved. Firstly, applicants like Dalton Packaging must ensure their applications are valid and meet the core criteria, which includes demonstrating that no substitutable goods are produced in Australia (section 269C). The CEO must also perform a duty to publish notices in the Gazette, inviting submissions from interested parties, ensuring transparency and public input into the decision-making process (subsection 269K(1)). Moreover, the CEO is obligated to make a decision based on the evidence presented and the criteria set out in the Act.
Breaching the provisions of the Customs Act 1901 can lead to several consequences. Firstly, if an entity fails to comply with the requirements of the TCO process, they may face penalties under section 269SJ, which addresses the specific goods that cannot be subject to a TCO. There are no explicit penalties outlined in the Explanatory Statement for failure to comply with the TCO process itself; however, general penalties for non-compliance with the Customs Act 1901 could apply. These penalties might include fines and imprisonment, depending on the nature and severity of the breach. Civil and administrative penalties might also apply, which can vary widely based on the circumstances.