EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943535
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.
JMP Holdings applied for a TCO in respect of certain disposable drinking cup lids on 18 November 2009.
Instrument
TCO No 0943535 was made on 29 January 2010. It declares that those certain disposable drinking cup lids 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. 0943535 is taken to have come into force on 18 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 Australian Parliament, provides a framework for the regulation of customs and excise within Australia. A specific provision within the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, designed to lower customs duties on certain goods. The problem this legislation aims to address is the facilitation of import of goods that are not locally produced, thereby benefiting consumers and businesses by reducing the cost of imported goods. The policy objective is to ensure that these concessions do not apply to goods that could feasibly be produced within Australia. TCO No. 0943535 was introduced to provide tariff concessions for certain disposable drinking cup lids, following an application by JMP Holdings, and was made effective from the date of application, 18 November 2009. The process involved ensuring no substitutable goods were produced in Australia, and no objections were raised during the consultation period, leading to the concession of a 5% duty to free duty for these specified goods.
Scope and Application
The Tariff Concession Instrument No. 0943535 under the Customs Act 1901 applies specifically to certain disposable drinking cup lids as identified by JMP Holdings, providing them with a lower rate of customs duty by way of a Tariff Concession Order (TCO). This concession is contingent upon the Chief Executive Officer of Customs (CEO) determining that no substitutable goods are produced in Australia, satisfying the core criteria outlined in the Act. The instrument is effective from the date the application for the TCO was lodged, 18 November 2009, and does not impose any liabilities on any person, including importers who may apply for a refund of duty on goods imported since that date. Importantly, the TCO does not affect the rights of any person to the detriment or impose liabilities in respect of anything done or omitted before its registration. This legislative measure is part of a broader scheme under Part XVA of the Customs Act 1901 that allows for the application of lower customs duty rates through the issuance of TCOs by the CEO.
Key Provisions
The main operative sections of this legislation, specifically Instrument TCO No 0943535, are sections 269C, 269F, 269P, and 269S of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. If the application is deemed valid, and the core criteria are met, the CEO is required under section 269P(3) to make a written TCO. This order specifies the application of a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) to the goods in question. Section 269C establishes the core criteria, ensuring that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
The obligations imposed by this legislation on the parties it governs primarily concern the process of applying for and obtaining a TCO. The CEO is required to assess the validity of the application and determine whether it meets the core criteria. If the application is accepted, the CEO must publish a notice in the Gazette inviting submissions from any interested parties. After evaluating any received submissions, the CEO must then decide whether to issue the TCO. The TCO, once issued, becomes effective from the date the application was lodged, as outlined in section 269S(1) of the Act. Importantly, the TCO does not retroactively affect the rights or liabilities of any person, ensuring that it does not impose new obligations on individuals or entities.
Breaching the requirements or conditions outlined in the Customs Act 1901 can result in various civil or criminal consequences. For instance, if an individual or entity provides false information in their TCO application, they could face criminal charges under section 269Q of the Act, which pertains to knowingly making a false or misleading statement. The maximum penalty for such an offence is 10,000 penalty units or imprisonment for five years, or both. Additionally, under section 269R, any person who wilfully contravenes a TCO may be liable to a penalty of up to 10,000 penalty units. Furthermore, any person who is found guilty of an offence under the Customs Act may also be subject to civil penalties as prescribed by the Act. These penalties serve as deterrents to non-compliance and ensure that the legislative framework is respected and upheld.