EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0911326
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 Pty Ltd applied for a TCO in respect of certain wedges paperboard flat packaged on 03 April 2009.
Instrument
TCO No 0911326 was made on 29 June 2009. It declares that those certain wedges paperboard flat packaged 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. 0911326 is taken to have come into force on 03 April 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, outlines a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). The Act provides a mechanism to apply lower rates of customs duty on goods that are the subject of a TCO. This legislative framework was introduced to address the need for flexibility in tariff regulations, enabling the CEO to respond to specific economic circumstances or requests from stakeholders by adjusting duty rates on certain imported goods. The policy objective is to facilitate smoother trade by reducing the duty burden on particular goods, thus promoting efficiency and competitiveness in the market. The TCO scheme was designed to ensure that no substitutable goods are produced in Australia, thereby preventing any domestic industry from being disadvantaged. The process requires the CEO to carefully evaluate applications and consider any submissions received before making a decision.
Scope and Application
The Customs Act 1901 provides for the creation of Tariff Concession Orders (TCOs) which reduce the rate of customs duty on specified goods. These orders are made by the Chief Executive Officer of Customs, who must be satisfied that the application for the concession meets the core criteria and does not relate to goods that cannot be subject to a TCO under section 269SJ. A 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, as defined by sections 269D and 269E of the Act. Detmold Packaging Pty Ltd applied for a TCO for certain wedges paperboard flat packaged on 03 April 2009, and the CEO was satisfied that the application met the core criteria, leading to the issuance of TCO No. 0911326 on 29 June 2009. This TCO applies to the specified goods, reducing the duty rate from 5% to free, and it took effect on the date of the application. The TCO does not adversely affect the rights of any person as at the date of registration and does not impose any liabilities on persons, except for the Commonwealth. Importers of the specified goods will benefit from the ability to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The primary operative sections of this legislation, specifically sections 269C, 269B, 269D, 269E, 269F, 269P, and 269S, establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning goods. If the CEO determines that the application meets the core criteria, a written order is made under section 269P(3), declaring the goods subject to a lower rate of customs duty. Section 269C specifies that the core criteria are met if no substitutable goods were produced in Australia on the day the application was lodged, with "substitutable goods" defined by sections 269B and 269D. The CEO must also ensure that the goods do not fall under the exclusions listed in section 269SJ.
The Act imposes several obligations on the parties involved. The CEO must assess applications for TCOs to ensure they meet the core criteria outlined in section 269C. They must also publish notices in the Gazette as required by subsection 269K(1) to invite submissions from any interested parties. If no submissions are received, the CEO proceeds to make the TCO as per the application. Furthermore, the CEO must ensure that the TCO does not adversely affect any rights or impose liabilities on persons other than the Commonwealth under subsection 269S(1). This means that any pre-existing rights or duties do not change unless explicitly addressed by the TCO.
Breaches of the provisions in this legislation can lead to various consequences. While the explanatory statement does not detail specific offences, it implies that failure to comply with the requirements for a TCO could result in the application not being processed or the TCO not being granted. The statement also indicates that the TCO does not impose any liabilities on any person, suggesting that the primary consequence of non-compliance would be the denial of the tariff concession rather than fines or other penalties. For the most part, the consequences are administrative rather than criminal or civil, focusing on the proper application and processing of TCOs.