EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906882
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.
Detmold Packaging applied for a TCO in respect of certain cups on 27 February 2009.
Instrument
TCO No 0906882 was made on 14 August 2009. It declares that those certain cups 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. 0906882 is taken to have come into force on 27 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. 0906882 was enacted in 2010 under the Customs Act 1901, aiming to address the need for concessional tariff rates for specific goods not produced domestically. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions on goods where no suitable Australian-made substitutes are available, thus encouraging imports and potentially reducing costs for consumers. The policy objective is to ensure that imports of such goods benefit from lower customs duties, which aligns with broader economic strategies to support industries reliant on imported materials. The instrument was created following an application by Detmold Packaging for tariff concessions on certain cups, which was approved as no similar goods were produced in Australia at the time. The instrument came into force on the date of the application, ensuring that no existing rights or liabilities were adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0906882 is part of the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to entities or individuals who seek to import goods that may benefit from a lower rate of customs duty under a TCO. The instrument operates on a national level, as it is a Commonwealth Act. The application process requires that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from eligibility, and that the goods do not have substitutable alternatives produced in Australia, as defined by section 269D and section 269E. If the CEO is satisfied with the application, a TCO is issued, specifying the applicable item in the Customs Tariff Act 1995, which in this case results in a free rate of duty for certain cups as opposed to the general rate of 5%. The TCO does not impose any liabilities on persons other than the Commonwealth and does not affect rights accrued before the date of registration, though it does enable importers to apply for duty refunds for imports made since the TCO came into force.
Key Provisions
The Tariff Concession Instrument No. 0906882 under the Customs Act 1901 (section 269F) enables the Chief Executive Officer (CEO) of Customs to issue a Tariff Concession Order (TCO) to lower the customs duty on specified goods. Detmold Packaging applied for a TCO for certain cups on 27 February 2009, which was granted on 14 August 2009, applying item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%. The CEO must ensure, as per section 269C, that the application meets core criteria, which include the absence of substitutable goods produced in Australia at the time of application, defined under sections 269D and 269E.
The obligations imposed by the Act on the parties involved include the necessity for the CEO to evaluate TCO applications against the stipulated criteria and to make a decision within a defined timeframe. Section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any interested party if they believe the TCO should not proceed. For this particular TCO, no submissions were received. Additionally, the CEO must ensure the TCO does not disadvantage any person's rights as per subsection 269S(1). This TCO, however, does not affect the rights of individuals other than the Commonwealth and does not impose any new liabilities.
Under the Customs Act 1901, breaches of the provisions concerning the issuance and application of TCOs can result in legal consequences. While the explanatory statement does not explicitly list offences or penalties for non-compliance with TCO provisions, general provisions within the Customs Act may apply. Breaches of the Act can lead to civil or criminal penalties, depending on the severity of the offence. For example, knowingly making a false statement or representation can attract penalties under section 236 of the Customs Act, which can include fines up to a substantial amount or imprisonment, or both, depending on the specific circumstances and the court's discretion.
The explanatory statement outlines that the TCO is effective from the date the application was lodged, 27 February 2009, ensuring that any affected parties, particularly importers, can benefit from the reduced duty rate retroactively. This means that importers can apply for a refund of any duties paid on the specified goods since the date the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations. This provision ensures that there is no financial disadvantage to importers who have already imported the goods before the TCO was officially issued.