EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908902
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.
3 Fish Pty Ltd applied for a TCO in respect of certain shopping bags on 17 March 2009.
Instrument
TCO No 0908902 was made on 29 May 2009. It declares that those certain shopping 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. 0908902 is taken to have come into force on 17 March 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 Parliament of Australia, establishes a framework for the imposition and administration of customs duties, including the creation of Tariff Concession Orders (TCOs) through the authority of the Chief Executive Officer of Customs. These TCOs provide for lower rates of customs duty on specified goods, contingent upon meeting certain criteria such as the absence of substitutable goods produced in Australia. The 2009 Tariff Concession Instrument No. 0908902, which came into effect on 17 March 2009, is an example of this mechanism in action, as it granted a concession for certain shopping bags, reducing their duty from 5% to free. The legislative process includes a requirement for public consultation, though in this instance, no submissions were received. The policy objective of these concessions is to encourage the importation of goods that are not locally produced, thereby potentially benefiting consumers and importers by reducing the cost of certain imported goods.
Scope and Application
The Tariff Concession Instrument No. 0908902 under the Customs Act 1901 applies to individuals or entities that have applied for and received a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO) for certain goods. Specifically, this instrument pertains to 3 Fish Pty Ltd's application for a TCO concerning certain shopping bags, which was approved on 29 May 2009. This Act operates on a national level across Australia, administered by the Commonwealth. The instrument allows for a lower rate of customs duty, in this case, reducing it from 5% to free, for the specified goods that are subject to the TCO. The application of the TCO is contingent on the CEO being satisfied that no substitutable goods were produced in Australia at the time of the application, aligning with the criteria set out in the Customs Act 1901. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. The TCO came into force on the date the application was lodged, which was 17 March 2009, and does not affect the rights of any person as at the date of registration to their disadvantage.
Key Provisions
The main operative sections of the Customs Act 1901 in relation to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. Section 269C stipulates that the CEO must decide whether the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269SJ excludes certain goods from being subject to a TCO. If the CEO is satisfied that the application meets the criteria and no objections are received, the CEO must issue a written TCO order, as per section 269P.
The obligations and requirements imposed by the Customs Act on parties or entities governed by the Act include the duty for applicants to ensure that their applications for TCOs meet the core criteria, particularly that no substitutable goods are produced in Australia. The CEO is obligated to assess each application against these criteria, including considering any submissions received. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid, as per section 269K(1). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on them in relation to activities before the TCO's registration date.
Any breaches of the Customs Act 1901 in the context of TCOs could lead to various civil or criminal consequences. While specific penalties are not detailed within the explanatory statement, the Act generally provides for penalties that could include fines and, in severe cases, imprisonment. The maximum penalties can vary depending on the nature and severity of the breach but typically reflect the seriousness of contravening the Act’s provisions. Civil penalties might involve financial penalties for non-compliance, while criminal penalties could result in fines or imprisonment for more egregious breaches.