EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909928
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.
Import Ants Pty Ltd applied for a TCO in respect of certain elephant dung paper on 25 March 2009.
Instrument
TCO No 0909928 was made on 05 June 2009. It declares that those certain elephant dung paper 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. 0909928 is taken to have come into force on 25 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 Tariff Concession Instrument No. 0909928, enacted in 2009, serves to amend the Customs Act 1901 by introducing tariff concessions for certain goods, thereby addressing the need for facilitating trade by reducing customs duty on specific imported goods. The instrument was introduced by the Chief Executive Officer of Customs in accordance with the legislative framework provided by the Customs Act, which allows for tariff concessions to be applied to goods that meet certain criteria, notably the absence of substitutable goods produced in Australia. The overarching policy objective is to encourage the importation of goods that are not domestically produced, thereby supporting economic efficiency and trade liberalisation.
The instrument was implemented following an application by Import Ants Pty Ltd for tariff concessions on certain elephant dung paper, and it specifies that these goods will attract a zero rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general rate of 5%. The instrument came into force on the date the application was lodged, 25 March 2009, and it ensures that the rights of importers are positively affected, allowing them to apply for duty refunds for imports made since the effective date of the concession. Importantly, it does not impose any new liabilities or adversely affect the rights of non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0909928, made under the Customs Act 1901, applies to entities and individuals involved in the importation of certain elephant dung paper, specifically targeting the industry and transactions related to these goods. This instrument was enacted to provide tariff concessions for these goods by the Chief Executive Officer of Customs, thereby exempting them from the general customs duty rate. The instrument's jurisdiction spans the Commonwealth of Australia, ensuring that the specified tariff concessions are uniformly applicable across the nation. Notably, the application of this instrument is restricted by the exclusions stipulated in section 269SJ of the Act, which outlines goods that cannot be subject to a Tariff Concession Order. The instrument does not affect the rights of any person except the Commonwealth and does not impose any liabilities on any individual or entity in respect of actions taken prior to its registration. Any further application or restrictions may be defined through subordinate instruments as necessary.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows any person to apply for a TCO in respect of specific goods. Upon receiving an application, the CEO must first ascertain that the goods do not fall under the exclusions specified in section 269SJ of the Act. If the application pertains to eligible goods, the CEO must then determine whether it meets the core criteria set out in section 269C. The application meets these criteria if, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are provided in sections 269D, 269E, and 269B, respectively.
The obligations of the CEO under this Act include ensuring that the application for a TCO is not in respect of ineligible goods and that it meets the core criteria. If satisfied, the CEO is mandated to make a written order (TCO) specifying that the goods in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995, thus applying a reduced or free duty rate. Additionally, as stipulated in subsection 269K(1), the CEO must publish a notice in the Gazette, inviting any person who believes the TCO should not be made to submit their reasons to the CEO. In the case of TCO No. 0909928, no submissions were received in response to this notice.
The Act imposes specific obligations on parties applying for a TCO and on the CEO in processing these applications. Applicants must ensure their applications are for eligible goods and meet the core criteria. The CEO, in turn, must rigorously verify these criteria and ensure the transparent publication of notices inviting submissions. The rights of third parties are protected by the provision that the TCO does not affect the rights of any person other than the Commonwealth as at the date of registration. Importers, however, benefit from the ability to apply for a refund of duty on goods imported since the TCO's effective date. Moreover, the TCO does not impose any liabilities on any person. The consequences for non-compliance with the Act are not explicitly detailed in the provided text; however, given the structured and regulated nature of the process, breaches may lead to administrative or legal repercussions as prescribed by other sections of the Customs Act 1901.