EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917820
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.
Marinucci applied for a TCO in respect of certain containers polypropyleen tamper evident on 27 May 2009.
Instrument
TCO No 0917820 was made on 14 August 2009. It declares that those certain containers polypropyleen tamper evident 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. 0917820 is taken to have come into force on 27 May 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods, including the imposition and collection of customs duty. The Act provides for the making of Tariff Concession Orders (TCOs) to grant preferential tariff rates on certain goods. The explanatory statement for Tariff Concession Instrument No. 0917820, issued on 14 August 2009, relates to an application by Marinucci for a TCO on certain containers polypropylene tamper evident. The Customs Act 1901 allows the Chief Executive Officer of Customs to make a TCO if certain core criteria are met, including that no substitutable goods are produced in Australia. The TCO was issued as the CEO was satisfied that no such goods were produced in Australia, resulting in a free rate of duty on these goods, down from the general rate of 5%. The TCO came into force on 27 May 2009, the date the application was lodged, and importers of the goods will be able to apply for a refund of duty on goods imported since that date.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for lower customs duties on certain goods. This Act applies to any person or entity that wishes to apply for a TCO for goods that are not specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269D, 269E, and 269F. The geographic reach of this Act is national, applying across Australia, and it operates under the overarching authority of the Customs Tariff Act 1995. The application and effect of a TCO are governed by the Act, with the CEO having the authority to make written orders based on the criteria set out in section 269C. The TCOs do not affect existing rights or impose liabilities on persons other than the Commonwealth, ensuring that the application of such concessions does not disadvantage or impose new obligations on importers or other stakeholders prior to the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0917820, under the Customs Act 1901, establishes a tariff concession order (TCO) that applies to certain containers polypropylene tamper evident, as per section 269F. This instrument was enacted to provide a lower rate of customs duty on these goods. Specifically, section 269P(3) stipulates that if the Chief Executive Officer (CEO) of Customs determines that the application for a TCO meets the core criteria outlined in section 269C, they must issue a written TCO. In this case, the CEO concluded that no substitutable goods were produced in Australia on the date the application was submitted, which is why item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free for these goods instead of the general rate of 5%.
The obligations imposed by this legislation on parties or entities it governs include the requirement for any person seeking a tariff concession to apply to the CEO as per section 269F. The CEO then has the duty to assess whether the application meets the criteria specified in section 269C. This involves ensuring that no substitutable goods were produced in Australia at the time of application, as defined in sections 269D and 269E of the Act. Additionally, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette, inviting submissions from interested parties on whether the TCO should be made. The CEO is also responsible for considering any submissions received and making a decision on the application.
The Act includes provisions for potential breaches and the associated penalties. While the explanatory statement does not detail specific offences or penalties for failing to comply with the TCO, general provisions in the Customs Act 1901 and related regulations may apply. Typically, non-compliance with customs regulations can lead to civil and criminal consequences, including fines and imprisonment. For instance, under section 232 of the Customs Act 1901, a person who contravenes the Act can be liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both, if the offence is prosecuted in a court. Furthermore, section 234A imposes stricter penalties for serious offences, which can include fines of up to 220,000 penalty units and imprisonment for up to 25 years.