EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912996
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.
Grocery Holdings Pty Ltd applied for a TCO in respect of certain cupcake muffin carrier kitchenware on 20 April 2009.
Instrument
TCO No 0912996 was made on 10 July 2009. It declares that those certain cupcake muffin carrier kitchenware 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. 0912996 is taken to have come into force on 20 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 Tariff Concession Instrument No. 0912996, enacted in 2009, was introduced to provide a concession on customs duty for certain cupcake muffin carrier kitchenware as per the Customs Act 1901. This instrument was developed in response to an application by Grocery Holdings Pty Ltd, which sought a tariff concession order (TCO) to apply to specific goods that were not produced in Australia and for which there were no substitutable goods domestically. The Tariff Concession Instrument was issued by the Chief Executive Officer of Customs (CEO) under section 269F of the Customs Act 1901, ensuring that the application met the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business. The policy objective was to facilitate the importation of these goods at a reduced duty rate, benefiting importers by potentially allowing them to claim a refund of duties paid on these goods since the effective date of the TCO, which was taken to be the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0912996 under the Customs Act 1901 applies specifically to entities or individuals who have applied for and received a Tariff Concession Order (TCO) in respect of certain goods, in this instance, cupcake muffin carrier kitchenware. This legislation is pertinent to those entities, such as Grocery Holdings Pty Ltd, that seek to import specific goods into Australia and are seeking relief from the standard customs duties through a TCO. The Act applies to the Commonwealth jurisdiction and extends to the national level through the Customs Act 1901 and the Customs Tariff Act 1995. The application of the TCO is contingent upon the CEO of Customs determining that no substitutable goods are produced in Australia in the ordinary course of business, as per the core criteria outlined in the Act. The exemption from duty is granted under the terms of the TCO and does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the date of the TCO's registration. The TCO allows for the importation of specified goods at a duty rate of free, rather than the general rate of 5%.
Key Provisions
The Tariff Concession Instrument No. 0912996, as an amendment to the Customs Act 1901, establishes a framework for applying tariff concessions on certain goods. Specifically, Section 269F of the Act allows an applicant to request a Tariff Concession Order (TCO) from the Chief Executive Officer (CEO) of Customs. If the CEO is satisfied that the goods are not excluded under Section 269SJ and meet the core criteria outlined in Section 269C, a TCO will be issued. This instrument, TCO No. 0912996, was made on 10 July 2009, and it declares that certain cupcake muffin carrier kitchenware are subject to a 5% general rate of duty, but with a concession making the duty rate free.
The Act imposes several obligations on the parties involved. The CEO of Customs must ensure that any TCO application complies with the criteria stipulated in the Act. This includes verifying that no substitutable goods are produced in Australia at the time the application is lodged, as defined by Sections 269D and 269E of the Act. Additionally, under Subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be made. In this case, no submissions were received, allowing the TCO to proceed.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can lead to civil and criminal consequences. Specifically, any person who knowingly or negligently contravenes a provision of the Act may be subject to penalties. These can include fines and, in severe cases, imprisonment. The exact penalties are determined by the specific breach and the discretion of the court, but they are designed to enforce compliance with the tariff concession scheme. The Act also provides mechanisms for the review and appeal of TCO decisions, ensuring that all parties have the opportunity to seek redress if they believe they have been unfairly treated.