EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0929985
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.
Huhtamakin Australia applied for a TCO in respect of certain dome lid food containers on 17 August 2009.
Instrument
TCO No 0929985 was made on 06 November 2009. It declares that those certain dome lid food containers 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. 0929985 is taken to have come into force on 17 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, addresses the need for streamlined customs duty processes by allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specified goods. This legislative framework aims to facilitate trade by reducing the financial burden on importers of certain goods, provided they meet specific criteria such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0929985, issued on 6 November 2009, exemplifies this process by granting a tariff concession to Huhtamakin Australia for certain dome lid food containers, setting their duty rate to free. This instrument was introduced following a formal application process and public consultation, ensuring transparency and fairness in its implementation. The policy objective is to enhance trade efficiency while maintaining revenue neutrality for the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0929985 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on specific goods, in this case, certain dome lid food containers. The Act facilitates the application process for tariff concessions by allowing eligible parties to apply to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO). The primary scope of the Act pertains to the eligibility criteria for TCOs, which must be met for the application to be approved. This includes ensuring that no substitutable goods are produced in Australia at the time of application, as outlined in section 269C. The Act's jurisdictional reach is federal, applying across Australia under the Commonwealth's authority to regulate customs duties. Any exclusions or limitations are explicitly defined in the Act, particularly in section 269SJ, which lists goods ineligible for tariff concessions. The Act also allows for the creation of subordinate instruments to further detail or modify the application of the primary legislation, ensuring flexibility in addressing emerging issues or specific cases.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, relate to the process and criteria for making Tariff Concession Orders (TCOs) (sections 269C, 269F, 269S, 269P, and 269K). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ and meets the core criteria outlined in section 269C, the CEO must make a written TCO (section 269P). This order will then specify that a lower rate of customs duty applies to the goods in question. Additionally, section 269K requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to submit any reasons why the TCO should not be made.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved include the CEO’s duty to assess TCO applications against the criteria specified in section 269C. This means the CEO must determine whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Furthermore, once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not proceed (subsection 269K(1)). The Act also mandates that the TCO does not affect the rights of any person as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken prior to the registration date (subsection 269S(1)).
Any breaches of the provisions under the Customs Act 1901 may lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences, penalties, or maximum punishments, it is generally understood that non-compliance with customs legislation can result in penalties such as fines or imprisonment, depending on the severity of the breach. The Customs Act 1901, in conjunction with the Customs Tariff Act 1995, provides a framework for enforcement and compliance, ensuring that any misuse or misunderstanding of the TCO provisions could lead to legal ramifications for the parties involved.