EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919307
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 disposable plates and cutlery on 9 June 2009.
Instrument
TCO No 0919307 was made on 05 November 2009. It declares that those certain disposable plates and cutlery 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. One submission objecting to the TCO application was received from Plantic Technologies Pty Ltd.
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. 0919307 is taken to have come into force on 9 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, as amended, facilitates the granting of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, which lower the rate of customs duty on certain goods. Enacted by the Parliament of Australia, this legislation aims to address economic inefficiencies and competitive disadvantages by ensuring that only those goods which are not produced domestically are subject to reduced customs duties. This mechanism is designed to encourage the import of goods that cannot be efficiently or economically produced in Australia, thereby promoting market efficiency and consumer choice. The process involves an application to the CEO, followed by a public consultation period and final decision-making based on the criteria outlined in the Act, ensuring a transparent and fair approach to tariff concessions.
Scope and Application
The Customs Act 1901, under its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to reduce customs duty rates on certain goods. A TCO applies to goods specified in the order, providing a lower rate of duty compared to the standard rate. This mechanism is available to individuals or entities that apply for such concessions, provided the goods in question are not excluded under section 269SJ of the Act. The CEO's decision to grant a TCO hinges on the absence of substitutable goods produced in Australia as per the criteria outlined in sections 269C and 269D of the Act. This legislative framework operates across Australia, impacting importers who stand to benefit from the reduced duty rates. Notably, the application of TCOs does not disadvantage or impose liabilities on any person other than the Commonwealth regarding actions taken before the TCO's registration date, as per subsection 269S(1) of the Act.
Key Provisions
The Customs Act 1901, particularly under Part XVA, outlines the process and criteria for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. If an individual or entity wishes to apply for a TCO, they must submit an application to the CEO under section 269F, ensuring the goods in question are not prohibited from such concessions as specified in section 269SJ. For the CEO to consider an application, it must meet the core criteria established in section 269C, which requires that, on the date the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO determines that the application meets these criteria, they are required to issue a written TCO under section 269P(3), specifying that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by this legislation on the parties involved are primarily administrative and procedural. For applicants, this includes submitting a valid application that satisfies the core criteria and responding to any objections raised during the consultation period. The CEO must review applications to ensure they meet the necessary criteria, issue a TCO if appropriate, and publish notices in the Gazette inviting submissions from any interested parties. Importers of the goods subject to a TCO are entitled to apply for a refund of duty paid on those goods from the date the TCO is deemed to have come into force, as per paragraph 126(1)(r) of the Regulations.
Breaches of the provisions outlined in the Customs Act 1901 or the Customs Regulations 1993 could lead to various civil and criminal consequences. Although specific offences and penalties are not detailed in this explanatory statement, general provisions under the Customs Act may include fines and imprisonment for non-compliance. For instance, under section 228 of the Act, the maximum penalty for fraudulent conduct can be significant, reflecting the seriousness of breaches in customs regulations. The precise penalties would depend on the nature and severity of the offence, as defined by the broader legislative framework.