EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0922296
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.
Devro Pty Ltd applied for a TCO in respect of certain collagen edible film on 30 June 2009.
Instrument
TCO No 0922296 was made on 11 September 2009. It declares that those certain collagen edible film 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. 0922296 is taken to have come into force on 30 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 Tariff Concession Instrument No. 0922296, enacted under the Customs Act 1901, addresses the issue of granting tariff concessions for specific imported goods. This legislative instrument was introduced to facilitate a more flexible approach to tariff regulations, allowing for reduced customs duties on certain goods that are not produced domestically. The instrument was enacted by the Chief Executive Officer of Customs in accordance with the provisions of the Customs Act, specifically in response to an application by Devro Pty Ltd for tariff concessions on collagen edible film. The primary objective of this instrument is to ensure that Australian importers of these goods benefit from a reduced duty rate, thereby aligning with the broader policy aim of promoting competitive and efficient trade practices.
The process involves the CEO of Customs evaluating applications for tariff concession orders, ensuring that the goods in question are not already produced in Australia and thus meet the criteria for tariff reduction. In the case of TCO No. 0922296, the CEO determined that collagen edible film qualified for a tariff concession, resulting in a duty rate of free, as opposed to the general rate of 5%. This decision was made following a public consultation period where no objections were raised. The tariff concession order came into effect on the date the application was lodged, 30 June 2009, without imposing any liabilities on persons other than the Commonwealth and benefiting the rights of importers.
Scope and Application
The Tariff Concession Instrument No. 0922296 is an instrument made under Part XVA of the Customs Act 1901, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This instrument specifically applies to the goods, in this case certain collagen edible film, that are the subject of a TCO application. The Act applies to entities or individuals who import or intend to import the specified goods, allowing them to benefit from a lower rate of customs duty. The TCO mechanism is designed to reduce the customs duty on goods provided that no substitutable goods are produced in Australia at the time the application is made. This instrument has a national reach as it is an instrument of the Commonwealth of Australia and applies across all states and territories. The instrument does not impose any liabilities on any person and does not disadvantage any person who may have rights as at the date of registration of the TCO. The TCO may be subject to further regulation or amendment through subordinate instruments, which may extend or restrict its application in accordance with the overarching Customs Act 1901.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0922296 under the Customs Act 1901 (section 269F) facilitate the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Specifically, section 269F allows any person to apply for a TCO in respect of goods, provided they are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO is required to consider whether the application meets the core criteria as outlined in section 269C. This criterion hinges on whether, at the time the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269D and 269E). If these criteria are met, the CEO must make a written order that declares the goods subject to the TCO, applying a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
In this context, obligations under the Act for the parties involved are primarily centred around the application process and the CEO's decision-making authority. The CEO must ensure that any TCO application is assessed against the core criteria, particularly focusing on the production of substitutable goods in Australia. If the CEO determines that the application satisfies these criteria, they are mandated to issue a TCO. Additionally, section 269K(1) imposes an obligation on the CEO to publish a notice in the Gazette, inviting any interested party to submit objections if they believe the TCO should not proceed. The CEO’s decision must consider any submissions received, although in this case, no submissions were lodged.
The legislation outlines specific consequences for non-compliance or breaches. While the explanatory statement does not detail explicit criminal or civil penalties for breaches related to TCOs, it is understood that general provisions within the Customs Act 1901 would apply. These provisions typically include fines and imprisonment for offences such as providing false information or engaging in fraudulent activities related to customs duty and tariff concessions. The exact penalties would depend on the nature and severity of the breach, as defined in the broader Customs Act and related regulations.
Furthermore, the explanatory statement clarifies that the TCO does not affect the rights of any person as at the date of registration, ensuring that no existing rights or liabilities are adversely impacted by the concession. It also highlights that the TCO provides a benefit to importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect, as stipulated under paragraph 126(1)(r) of the Regulations. The TCO ensures that no new liabilities are imposed on any person, maintaining the integrity and fairness of the tariff concession scheme.