EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0910409
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.
Sunbeam Corporation applied for a TCO in respect of certain plastic bag rolls on 27 March 2009.
Instrument
TCO No 0910409 was made on 19 June 2009. It declares that those certain plastic bag rolls 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. 0910409 is taken to have come into force on 27 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 Australian Parliament, provides a framework for managing customs duties and facilitating international trade. Part XVA of the Act outlines a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme was introduced to address the need for tariff concessions on specific goods where no suitable domestic alternatives exist, thus promoting economic efficiency and international trade. TCO No. 0910409, made on 19 June 2009, was issued in response to an application by Sunbeam Corporation for tariff concessions on certain plastic bag rolls, which were not produced in Australia. The policy objective of this concession is to lower the duty rate from the general 5% to free, benefiting importers of these goods by potentially allowing them to claim refunds for duties paid before the concession's effective date.
Scope and Application
The Tariff Concession Instrument No. 0910409, made under the Customs Act 1901, applies to individuals and entities seeking tariff concessions for specific goods, namely certain plastic bag rolls, which are subject to a reduced rate of customs duty. This instrument facilitates the application process by the Chief Executive Officer of Customs (CEO) for Tariff Concession Orders (TCO), provided the goods do not fall under the exclusions specified in section 269SJ of the Act. The geographic reach of this legislation is national, as it pertains to goods imported into Australia, and its application is not restricted to specific states or territories. The instrument takes effect from the date the application is lodged, in this case, 27 March 2009. Any person may apply for a TCO, but the CEO must ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was made, as per sections 269C and 269D of the Act. Once a TCO is registered, it does not affect the rights of any person as they stood on the date of registration, nor does it impose any liabilities on persons other than the Commonwealth, thereby protecting importers from any disadvantage or additional burdens arising from the concession.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0910409, made under the Customs Act 1901, establish the framework for the application and approval of Tariff Concession Orders (TCOs). Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for TCOs on specific goods, provided they do not fall under the prohibited categories outlined in section 269SJ. The CEO is required to assess applications based on core criteria, such as the absence of substitutable goods produced in Australia, as stipulated in section 269C. If the application meets these criteria, the CEO must issue a written TCO, as mandated by section 269P(3).
The obligations imposed by the Act on the parties involve ensuring that applications for TCOs are made in accordance with the stipulated criteria. The CEO has the duty to review applications and determine whether they meet the core criteria, which includes assessing whether substitutable goods are being produced in Australia (section 269C). If the CEO finds that the application meets the criteria, they must issue a TCO, which specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from interested parties, as per section 269K(1), although in this case, no submissions were received.
Breach of the provisions under this Act can lead to various legal consequences. For instance, if the CEO issues a TCO without proper justification or fails to follow the stipulated process, it could result in the TCO being challenged in court, potentially leading to its nullification. Moreover, any misuse of the TCO by the applicant, such as importing goods not covered by the order, could result in penalties under the Customs Act, including fines and imprisonment. The specific penalties are not detailed in this explanatory statement but are generally outlined in the Customs Act and related regulations.