EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1026179
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.
Bunzl Outsourcing Services Limited applied for a TCO in respect of certain incontinence pads on 11 June 2010.
Instrument
TCO No 1026179 was made on 22 November 2010. It declares that those certain incontinence pads 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. 1026179 is taken to have come into force on 11 June 2010.
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, provides a framework for the administration of customs and excise duties, and the Tariff Concession Orders (TCO) are a component of this scheme. Specifically, the Act allows for the application of lower rates of customs duty on goods that are the subject of a TCO, provided certain criteria are met. Instrument No. 1026179, introduced under the Customs Act, addresses the issue of tariff concessions by allowing for the application of free duty rates on certain incontinence pads, as determined by the Chief Executive Officer of Customs, on the basis that no substitutable goods were produced in Australia at the time of application. This initiative aims to provide economic benefits to importers by reducing their duty obligations and ensuring they can apply for refunds on duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1026179 applies to goods specified in the instrument, in this case certain incontinence pads, and is governed by the Customs Act 1901, administered by the Chief Executive Officer of Customs (CEO). The instrument provides tariff concessions by reducing the duty on these goods from the general rate of 5% to free, provided that the application for a Tariff Concession Order (TCO) meets the core criteria set out in the Act, such as the absence of substitutable goods produced in Australia. This instrument extends its application to the person or entity that applied for the concession, in this instance Bunzl Outsourcing Services Limited, and benefits importers of the specified goods by allowing them to apply for a refund of duty on goods imported since the TCO came into force. The instrument applies on a Commonwealth level and does not disadvantage any person by imposing liabilities or affecting rights as at the date of registration for anything done or omitted before that date. Any exclusions or exemptions are outlined in the relevant sections of the Customs Act 1901 and the Customs Tariff Act 1995. The application and scope of the TCO can be extended or restricted through subordinate instruments, although none are specified in this instance.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) under section 269F, where a person may apply to the Chief Executive Officer (CEO) of Customs for a concession on customs duty for certain goods. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, which includes the absence of substitutable goods produced in Australia at the time of the application, a TCO is issued. This is detailed in section 269P(3) of the Act. For example, TCO No. 1026179, issued on 22 November 2010, declared that certain incontinence pads were subject to a duty rate of free instead of the general 5% duty, as no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not be issued. Although no submissions were received in response to the notice for TCO No. 1026179, this process ensures transparency and opportunity for input. Furthermore, section 269S(1) mandates that a TCO comes into effect on the date the application is lodged, which was 11 June 2010 for TCO No. 1026179. This ensures that the rights of parties, particularly importers, are protected from any disadvantage as a result of the TCO, and it also exempts anyone from liability for actions taken before the TCO's effective date.
In terms of potential breaches and consequences, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the provisions of a TCO. However, general legal principles and the Customs Act's overarching framework imply that non-compliance with customs regulations could lead to penalties, including fines or legal action. The exact penalties would depend on the nature and severity of the breach, as well as other relevant legislation. While the explanatory statement does not specify maximum penalties, the Act's enforcement provisions allow for significant deterrents against non-compliance.