EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942793
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.
B Box for Kids applied for a TCO in respect of certain baby wipe and nappy change containers on 12 November 2009.
Instrument
TCO No 0942793 was made on 15 March 2010. It declares that those certain baby wipe and nappy change 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. One submission objecting to the TCO application was received from Sdi Plastics.
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. 0942793 is taken to have come into force on 12 November 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 Parliament of Australia, serves as the foundational piece of legislation governing the regulation of customs and excise in Australia. One of its key components, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative instrument was introduced to address the need for flexible tariff adjustments that can be responsive to specific economic and market conditions, particularly ensuring that certain goods can enter Australia at reduced or no duty rates when there are no suitable domestic alternatives. The objective is to facilitate trade by lowering the cost of imported goods, thus encouraging their availability in the Australian market and providing benefits to consumers and businesses. The explanatory statement outlines the process for applying for a TCO and the criteria that must be met for such an order to be considered, ensuring a transparent and fair application process.
Scope and Application
The Tariff Concession Order No. 0942793 applies to specific baby wipe and nappy change containers and was made under Part XVA of the Customs Act 1901. The Act provides a mechanism for the Chief Executive Officer of Customs (CEO) to grant tariff concessions on goods, reducing the rate of customs duty for eligible products. The instrument applies to entities importing the specified goods and aims to facilitate their access to these products by reducing or eliminating customs duty. The geographic reach of this legislation is national, as it pertains to goods entering Australia, and it is enacted under Commonwealth authority. The order was made after Box for Kids applied for a tariff concession on 12 November 2009, and it was published in the Gazette with an invitation for objections. The CEO was satisfied that no substitutable goods were produced in Australia, and the tariff concession was granted, resulting in the affected goods being subject to a 0% duty rate instead of the general rate of 5%. The concession does not affect the rights of any person as of the registration date and does not impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0942793 include sections 269C, 269P, and 269S of the Customs Act 1901, which outline the criteria and process for making Tariff Concession Orders (TCOs). Section 269C specifies the core criteria for a TCO, which requires that, on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Section 269P outlines the process for the Chief Executive Officer (CEO) of Customs to make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S defines the commencement date of the TCO, which is taken to be the date on which the application for the TCO was lodged.
The obligations imposed on the parties or entities governed by the Act include the requirement for an applicant, such as Box for Kids, to submit an application to the CEO for a TCO, ensuring that the application meets the core criteria specified in section 269C. The CEO must then decide whether the application meets these criteria, and if satisfied, must make a written TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who may object to the TCO, as stipulated in section 269K. The Act also requires that the TCO does not affect the rights of a person, other than the Commonwealth, as at the date of registration in a manner that disadvantages that person or imposes liabilities on them in respect of anything done or omitted to be done before the date of registration.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not specify particular offences or penalties related to the making of TCOs. However, non-compliance with the Act or the Tariff may result in civil or criminal consequences under other provisions of the Act. For instance, if goods are imported without the correct duty being paid due to a misinterpretation or misapplication of a TCO, it could potentially lead to penalties under the customs legislation, which may include fines or other civil penalties. The maximum penalties would depend on the specific breaches and the provisions of the Customs Act 1901 that are contravened.