EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052247
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.
Wholesale Group International applied for a TCO in respect of certain oxygen absorber sachets on 29 November 2010.
Instrument
TCO No 1052247 was made on 28 February 2011. It declares that those certain oxygen absorber sachets 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. 1052247 is taken to have come into force on 29 November 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 Australian Parliament, provides a framework for the administration of customs and excise. This Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply lower rates of customs duty to certain goods. This legislative instrument, Tariff Concession Instrument No. 1052247, was introduced to address the need for tariff concessions for specific goods, ensuring that Australian importers are not disadvantaged by higher customs duties when substitutable goods are not produced domestically. The policy objective of this instrument is to facilitate trade by reducing the duty on certain oxygen absorber sachets, thereby benefiting importers and potentially enhancing the competitiveness of these goods in the Australian market. The instrument was made on 28 February 2011, and it took effect from 29 November 2010, the date the application was lodged.
Scope and Application
The Customs Act 1901 applies to individuals and entities seeking tariff concessions for specific goods, enabling them to potentially benefit from reduced customs duty rates. The Act allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods not specified in section 269SJ of the Act, provided no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E and 269F of the Act. This scheme is available nationwide, across the Commonwealth of Australia, and its application extends to all sectors that import goods. Any exclusions are explicitly outlined in the Act itself, such as those specified in section 269SJ. Additionally, the CEO can enact further application of this scheme through subordinate instruments, although the primary scope and criteria are established by the Act. The Tariff Concession Instrument No. 1052247, which declares certain oxygen absorber sachets to be subject to a TCO, exemplifies this process by setting the duty rate for these goods at free, down from the general rate of 5%.
Key Provisions
The Tariff Concession Instrument No. 1052247, made under the Customs Act 1901, establishes a tariff concession order (TCO) for certain oxygen absorber sachets. Section 269F of the Act allows individuals to apply for a TCO, provided that the goods in question are not those specified in section 269SJ, which outlines the goods ineligible for a TCO. If the Chief Executive Officer (CEO) of Customs is satisfied that the application complies with the core criteria set out in sections 269C and 269P, the CEO must make a TCO (section 269P(3)).
For the specific case of oxygen absorber sachets, the CEO was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria. As a result, the CEO issued a written TCO (item 50 of Schedule 4 to the Customs Tariff Act 1995) that lowered the general duty rate of 5% to free for these particular goods (section 269P(3)). This TCO came into effect on the date the application was lodged, 29 November 2010 (subsection 269S(1)).
The Act imposes certain obligations on both the CEO and applicants for TCOs. Once a TCO application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit their reasons against the TCO (subsection 269K(1)). If no submissions are received, as in this case, the CEO proceeds to make the TCO. The Act also ensures that the rights of third parties are not adversely affected by the TCO, and it does not impose any new liabilities on individuals or entities. Importers of the affected goods can apply for a refund of duty on imports since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Under the Customs Act 1901, breaches of the provisions related to TCOs can result in penalties. Although the Explanatory Statement does not detail specific offences or penalties for TCO breaches, the Act generally provides for a range of civil and criminal penalties for non-compliance with customs regulations. These penalties can include fines, imprisonment, or both, depending on the severity of the breach. The maximum penalties are determined by the specific provisions of the Act and any related regulations. It is important for all parties to comply with the requirements to avoid potential legal consequences.