EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914307
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.
Laudley Holdings applied for a TCO in respect of certain plastic laundry balls on 30 April 2009.
Instrument
TCO No 0914307 was made on 17 July 2009. It declares that those certain plastic laundry balls 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. 0914307 is taken to have come into force on 30 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. 0914307, enacted in 2009, is an amendment to the Customs Act 1901. This legislative instrument aims to address the gap in tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce or eliminate customs duty on certain goods. This process ensures that the application of these tariff concessions aligns with the policy objectives outlined in the Customs Act, particularly under sections 269C, 269F, and 269P. The instrument was introduced by the Australian Parliament to provide relief to importers by potentially lowering the duty on certain goods, provided no substitutable goods are produced in Australia. In the case of plastic laundry balls, the tariff was reduced from 5% to free, effective from the date of the application, 30 April 2009. This legislative change was made without any submissions against the TCO application, indicating a smooth process and acceptance of the tariff concession by all relevant parties.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods that qualify for a lower rate of customs duty, as determined by the CEO. An application for a TCO can be made by any person, provided the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for TCOs. The CEO evaluates the application against the core criteria outlined in section 269C, which requires that no substitutable goods are produced in Australia at the time the application is lodged. This requirement is further defined by sections 269D and 269E, which detail what constitutes goods produced in Australia and ordinary course of business, respectively. If the application meets these criteria, the CEO issues a TCO under section 269P, specifying the reduced duty rate applicable to the goods. In the case of TCO No. 0914307, certain plastic laundry balls were granted a concession, reducing their duty rate from 5% to free, effective from 30 April 2009. This instrument does not retroactively affect the rights or impose liabilities on any person, ensuring that it only benefits importers who can claim duty refunds for imports made post-registration.
Key Provisions
The main operative sections of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0914307, provide for the establishment and operation of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods, provided these goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria set out in sections 269B and 269C, which involve determining whether substitutable goods are produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO is required to issue a written order (a TCO) under section 269P(3), which specifies the goods and the applicable duty rate.
The Act imposes several obligations on the parties involved. The CEO of Customs must evaluate each TCO application to determine if it meets the core criteria and make a written order if the criteria are satisfied. Additionally, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. This ensures transparency and allows for public input before the TCO is issued. Furthermore, the TCO is deemed to come into force on the day the application was lodged, as per subsection 269S(1). This means that the tariff concessions apply retroactively from the date of the application, benefiting importers who may now apply for a refund of duty on goods imported since that date.
Breaches of the provisions of the Customs Act 1901, including the issuance of improper TCOs, could lead to both civil and criminal consequences. Civil penalties may include fines and the requirement to pay back any duties improperly remitted. Criminal penalties could include fines and imprisonment, depending on the severity and intent behind the breach. The specific penalties are not detailed in the explanatory statement, but they are generally aligned with the severity of the offence under the overarching customs legislation. The CEO's duty to ensure that TCO applications meet the criteria and to publish notices for public submissions is critical to avoiding legal repercussions.