EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928747
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.
Zeal Pty Ltd applied for a TCO in respect of certain plastic caps on 07 August 2009.
Instrument
TCO No 0928747 was made on 23 October 2009. It declares that those certain plastic caps 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. 0928747 is taken to have come into force on 07 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise duties, including provisions for Tariff Concession Orders (TCOs) under Part XVA. These orders allow for reduced customs duty rates on specific goods, provided they meet certain criteria. The objective of this legislative instrument is to address the problem of ensuring that Australian businesses have access to necessary goods at reduced tariff rates, thereby promoting competitive and efficient trade practices. This is achieved by allowing the Chief Executive Officer of Customs to consider and grant applications for TCOs, subject to the absence of substitutable goods produced in Australia. Tariff Concession Instrument No. 0928747, issued on 23 October 2009, exemplifies this process by granting a TCO for certain plastic caps, resulting in a tariff rate reduction from 5% to free. This instrument ensures that importers can benefit from the tariff reduction while maintaining the rights and obligations of all parties involved.
Scope and Application
The Tariff Concession Instrument No. 0928747, which was made under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been granted by the Chief Executive Officer of Customs (CEO). This Act specifically governs the application process for TCOs, which aim to provide a lower rate of customs duty for certain imported goods, provided they meet the criteria set out in the Act. The application of the Act extends to any person who applies for a TCO in respect of goods, and the CEO is responsible for determining whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia. The geographic scope of this legislation is national, as it pertains to the importation of goods into Australia and is governed by the Commonwealth. The Act also includes provisions for exemptions, such as the exclusion of certain goods specified in section 269SJ from being subject to a TCO. The Act may be extended or restricted through subordinate instruments, which can provide additional guidelines or specifics on the application and implementation of TCOs. The commencement date of the TCO is the day on which the application was lodged, ensuring that the rights of importers are protected from any disadvantage or imposition of liabilities before the TCO's effective date.
Key Provisions
The primary sections of this legislation, specifically sections 269C, 269F, and 269P(3) of the Customs Act 1901, establish the framework for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO). Section 269F allows any person to apply for a TCO in respect of goods, while section 269C stipulates that an application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)) that declares the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This instrument, TCO No. 0928747, made on 23 October 2009, effectively applies a zero rate of customs duty on certain plastic caps that were the subject of an application by Zeal Pty Ltd on 07 August 2009.
The Act imposes specific obligations on both the applicant and the CEO. For applicants, the main requirement is to ensure that their application for a TCO meets the core criteria as outlined in section 269C. This involves demonstrating that no substitutable goods are being produced in Australia at the time of application. The CEO, on the other hand, has the obligation to assess the validity of the application against these criteria. If satisfied, the CEO must proceed to make a written order (section 269P(3)) and publish a notice in the Gazette (subsection 269K(1)) inviting any interested parties to submit objections. In this case, no submissions were received, indicating that the CEO did not encounter any objections to the application.
Under the Customs Act 1901, breaches of the conditions set out for TCOs or failure to comply with the obligations imposed by the Act may result in various penalties or consequences. Although the specific penalties are not detailed in the text, the general framework of the Customs Act 1901 suggests that breaches could lead to criminal or civil penalties, including fines and imprisonment. The maximum penalties would depend on the nature and severity of the breach, as well as any relevant case law and statutory provisions. The Act does not impose any liabilities on persons other than the Commonwealth, ensuring that the rights of importers will be beneficially affected, particularly concerning the ability to apply for a refund of duty on goods imported since the TCO came into force.