EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928171
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.
Huhtamaki Australia applied for a TCO in respect of certain tableware and or kitchenware disposable cups on 04 August 2009.
Instrument
TCO No 0928171 was made on 16 October 2009. It declares that those certain tableware and or kitchenware disposable cups 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. 0928171 is taken to have come into force on 04 August 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, enacted by the Australian Parliament, provides the legislative framework for the administration of customs duties and other import-related taxes. Among its various provisions, Part XVA of the Act establishes a scheme for Tariff Concession Orders (TCOs), which allows the Chief Executive Officer of Customs to grant concessions on the rates of customs duty applicable to specific goods. The Tariff Concession Instrument No. 0928171, issued in 2009, was introduced to address the need for tariff concessions on certain goods that were not being produced domestically. In this instance, Huhtamaki Australia applied for a TCO on specific tableware and kitchenware disposable cups, and the concession was granted after it was determined that no substitutable goods were being produced in Australia. The policy objective is to provide relief to importers of these goods by setting their customs duty rate to free, thereby potentially lowering the cost of these imported items.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the making of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO). This legislative provision applies to individuals or entities seeking to import goods that are subject to a lower rate of customs duty, provided they meet the specified core criteria. The CEO must be satisfied that the goods in question are not specified in section 269SJ, which excludes certain goods from the scheme, and that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The application process involves evaluating whether the imported goods have Australian-produced alternatives that can serve the same purpose or design use. If the CEO determines that the application meets these core criteria, a TCO is issued, thereby applying a prescribed lower duty rate on the specified goods. The TCO scheme operates on a national level, impacting importers by potentially reducing their customs duty obligations on certain goods, as exemplified by Tariff Concession Instrument No. 0928171 concerning disposable tableware and kitchenware cups, which sets the duty rate at free, down from the general rate of 5%.
Key Provisions
The Customs Act 1901 (the Act) under Part XVA provides the framework for Tariff Concession Orders (TCOs), which can be applied for by individuals or entities seeking to reduce the customs duty on specific goods. Section 269F of the Act allows any person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO. If the application is not for goods specified in section 269SJ, which are ineligible for TCOs, the CEO must assess whether the application meets the core criteria set out in section 269C. This involves determining if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. For clarity, "goods produced in Australia" is defined by section 269D, "ordinary course of business" by section 269E, and "substitutable goods" by section 269D in respect of goods the subject of a TCO application, which are goods produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods the subject of the application can be put.
Entities applying for a TCO must comply with the requirements stipulated in section 269C. Specifically, they must ensure that no substitutable goods were being produced in Australia on the date the application was lodged. Once the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to make a written order (the TCO) that specifies the goods and the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) to which they apply. In the case of TCO No. 0928171, the CEO determined that certain tableware and kitchenware disposable cups qualified for a tariff concession, resulting in a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice invites any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO. In the instance of TCO No. 0928171, no submissions were received in response to this invitation. Additionally, section 269S(1) states that a TCO is taken to have come into force on the day on which the application for the TCO was lodged. Consequently, TCO No. 0928171 is deemed to have come into force on 04 August 2009. The TCO does not affect the rights of any person other than the Commonwealth in a manner that would disadvantage them or impose liabilities for actions taken before the TCO's registration.
The Act also delineates the consequences of non-compliance. While specific offences, penalties, or consequences for breach are not detailed in the provided text, the nature of the TCO and the regulatory framework implies that any misuse or fraudulent application could lead to legal ramifications. This might include civil or criminal penalties, depending on the severity and intent of the breach. The maximum penalties for such offences would be determined in accordance with the relevant Australian laws governing customs and taxation.