EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914436
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.
Amcor Flexibles applied for a TCO in respect of certain flexible pouches on 30 April 2009.
Instrument
TCO No 0914436 was made on 24 July 2009. It declares that those certain flexible pouches 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. 0914436 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. 0914436, enacted in 2009 under the Customs Act 1901, was introduced to address the need for concessional tariff rates for specific goods not produced domestically. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This legislative instrument was developed following an application by Amcor Flexibles for a TCO concerning certain flexible pouches, which were declared to be subject to a free rate of duty as no substitutable goods were being produced in Australia. The policy objective here is to support the importation of goods that are not locally manufactured, thereby potentially reducing costs for importers and encouraging competition. The instrument was published in the Gazette with an invitation for submissions, none of which were received, indicating broad acceptance of the tariff concession. The TCO came into effect on the date the application was lodged, 30 April 2009, and it does not impose any liabilities or disadvantage the rights of any person except the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders enable the application of a reduced rate of customs duty to specified goods, contingent on the CEO's determination that no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. This legislative mechanism is designed to facilitate trade by reducing the cost of importing certain goods, as illustrated by Tariff Concession Order No. 0914436 issued on 24 July 2009. This particular order, concerning certain flexible pouches, was made in response to an application by Amcor Flexibles, and it declares that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general rate of 5%. The instrument applies to the specific goods identified in the order, with no impact on the rights or liabilities of any person other than the Commonwealth. The CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, although in this instance, no submissions were received. The TCO takes effect from the date the application was lodged, which in this case is 30 April 2009.
Key Provisions
The Tariff Concession Instrument No. 0914436, under the Customs Act 1901, primarily operates to facilitate the reduction of customs duties on certain goods (section 269F). It allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) on specific goods, provided they are not those listed in section 269SJ of the Act. If the application adheres to the core criteria, including the absence of substitutable goods produced in Australia (section 269C), the CEO must issue a written order declaring the goods subject to a lower rate of duty, as specified in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). For the goods in question, this means the general duty rate of 5% is reduced to free of charge.
The Act imposes specific obligations on applicants and the CEO. Applicants must ensure their requests meet the core criteria, which involves demonstrating that no substitutable goods are produced in Australia (section 269C). The CEO, on receiving a valid application, must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not proceed (subsection 269K(1)). If no submissions are received, the CEO is mandated to proceed with the order (subsection 269S(1)). In the case of TCO No. 0914436, no submissions were received, and the order was issued on 24 July 2009.
Under the Act, breaches or non-compliance with the terms of a TCO may result in various consequences. While the Act does not explicitly state penalties for breaches of TCOs, it is governed by broader provisions of the Customs Act 1901, which include significant penalties for non-compliance with customs regulations. These penalties can include fines and imprisonment, depending on the severity of the breach. Additionally, any failure to adhere to the terms of a TCO may result in civil consequences such as the denial of duty refunds or other financial penalties imposed by the relevant authorities.