EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0934614
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.
Tea Too Pty Ltd applied for a TCO in respect of certain packaging tins on 15 September 2009.
Instrument
TCO No 0934614 was made on 27 November 2009. It declares that those certain packaging tins 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. 0934614 is taken to have come into force on 15 Septemner 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 was enacted by the Parliament of Australia and provides a framework for the administration of customs and excise duties. Part XVA of the Act establishes the mechanism for Tariff Concession Orders (TCOs), which the Chief Executive Officer of Customs (CEO) may issue to reduce customs duty rates on specific goods. The purpose of this mechanism is to allow for the application of lower duty rates when certain conditions are met, such as when no substitutable goods are produced in Australia. In the case of Tariff Concession Instrument No. 0934614, Tea Too Pty Ltd applied for a TCO concerning certain packaging tins, which was subsequently approved by the CEO on 27 November 2009. This order applies to item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the duty rate from 5% to free. The policy objective of the TCO scheme is to provide tariff relief where appropriate, facilitating the importation of goods that are not produced domestically, thereby benefiting importers and potentially encouraging trade.
Scope and Application
The Tariff Concession Instrument No. 0934614, under Part XVA of the Customs Act 1901, applies to specific goods, in this case, certain packaging tins, as determined by the Chief Executive Officer of Customs (CEO) when processing an application for a Tariff Concession Order (TCO). The Act applies to any entity or individual who applies for a TCO in respect of goods that meet the criteria stipulated under section 269C of the Act, which includes the condition that no substitutable goods are produced in Australia at the time of application. The geographic reach of this Act is national, as it pertains to the Australian Customs framework and the Customs Tariff Act 1995. Notably, the Act does not apply to goods specified in section 269SJ, which outlines those goods ineligible for a TCO. The application of the Act may be further extended or refined through subordinate instruments, though the primary legislation sets out the fundamental criteria and process. The instrument in question, TCO No. 0934614, came into effect on the date of the application, 15 September 2009, and does not disadvantage any person or impose liabilities on any individual or entity for actions taken prior to its registration.
Key Provisions
The main operative sections of this legislation include section 269F, which allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be satisfied for a TCO to be granted, primarily focusing on the absence of substitutable goods produced in Australia. Section 269P(3) specifies that if the CEO is satisfied the application meets these criteria, a TCO must be issued, as seen in TCO No. 0934614. This TCO specifies that certain packaging tins will be subject to a free rate of duty instead of the general 5% duty.
The obligations imposed by this Act on the relevant parties are clear. The CEO of Customs has the duty to assess TCO applications against the criteria set out in section 269C. The CEO must also ensure that a notice is published in the Gazette as soon as practicable after accepting an application, inviting any interested parties to make submissions if they believe the TCO should not proceed. In this case, no submissions were received. The applicant, in this instance Tea Too Pty Ltd, must ensure their application meets the criteria set forth in the Act, and that they provide any necessary information to substantiate their claim.
In terms of offences and penalties, the Act does not explicitly outline criminal or civil penalties for breaches of the TCO provisions. However, failure to comply with the conditions of a TCO or any other related legislative requirements could potentially lead to legal consequences, including fines or other penalties under the broader Customs Act 1901. It is also worth noting that if a TCO is issued in error, it could be subject to review or revocation, with any resulting financial implications borne by the applicant. The specific financial implications would depend on the nature and extent of any breach or error.