EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919013
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.
JMP Holdings Pty Ltd applied for a TCO in respect of certain food packaging on 5 June 2009.
Instrument
TCO No 0919013 was made on 5 November 2009. It declares that those certain food packaging 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. 0919013 is taken to have come into force on 5 June 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 to provide for the administration of customs and excise, including the collection of duties and taxes on goods imported into Australia. One of the mechanisms under this Act is the Tariff Concession Order (TCO), which was introduced to address the problem of providing tariff relief on specific goods where they are not produced domestically, thus ensuring fair competition and access to essential goods. The Act was enacted by the Australian Parliament and aims to facilitate trade by reducing the cost of imported goods where local production is not viable. The Tariff Concession Instrument No. 0919013, made under this Act, provides a specific instance of tariff relief, in this case, for certain food packaging, thereby supporting importers and potentially lowering consumer costs for these goods.
Scope and Application
The Tariff Concession Instrument No. 0919013 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) is requested and granted. The instrument, which was made on 5 November 2009, pertains to certain food packaging and provides that these goods are subject to a reduced rate of customs duty, specifically zero percent, as opposed to the general rate of 5% outlined in Schedule 4 of the Customs Tariff Act 1995. This concession applies to the goods from the date the application was lodged, which is 5 June 2009. The concession is applicable to those goods that were not being produced in Australia on the date of the application and which have no substitutable equivalents produced domestically. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities on individuals or entities.
Key Provisions
The primary operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), are sections 269C, 269F, and 269P (subsection 3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO, which provides a lower rate of customs duty on specified goods. Section 269C establishes the core criteria that an application must meet, primarily ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. If the CEO is satisfied that these criteria are met, section 269P(3) mandates that the CEO make a written order declaring the goods subject to the TCO.
The Act imposes several obligations on the parties it governs. Firstly, the CEO must determine whether a TCO application meets the core criteria as outlined in section 269C. This involves assessing whether substitutable goods are produced in Australia on the day the application is made. Secondly, upon receiving a valid TCO application, 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, as required by subsection 269K(1). The CEO is also required to make a written TCO order if the application meets the core criteria. Additionally, the CEO must ensure that the TCO does not disadvantage any person (other than the Commonwealth) in terms of rights or impose liabilities on any person in respect of actions taken before the TCO comes into force.
The Customs Act 1901 does not explicitly outline offences, penalties, or civil/criminal consequences for breaches related to TCOs. However, the Act does state that a TCO does not affect the rights of a person (other than the Commonwealth) to their disadvantage or impose liabilities on any person. The regulations under the Act, such as paragraph 126(1)(r) of the Customs (Tariff) Regulations 1996, provide that importers of goods subject to a TCO can apply for a refund of duty on goods imported since the TCO is taken to have come into force. While the Act does not specify penalties for non-compliance with TCO provisions, any general breaches of customs regulations could potentially lead to enforcement actions by the CEO or other relevant authorities.