EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1054469
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.
Biopak Pty Ltd applied for a TCO in respect of certain plastarch material disposable cutlery on 14 December 2010.
Instrument
TCO No 1054469 was made on 7 March 2011. It declares that those certain plastarch material disposable cutlery 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. 1054469 is taken to have come into force on 14 December 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 Commonwealth Parliament, provides a framework for the imposition and regulation of customs duties, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA of the Act. These orders allow for a lower rate of customs duty on specified goods when certain conditions are met. The Tariff Concession Instrument No. 1054469, issued on 7 March 2011, applies to certain plastarch material disposable cutlery, granting them a free rate of duty as no substitutable goods were produced in Australia. The instrument was introduced to address the need for tariff concessions on specific goods that are not domestically produced, thereby facilitating the importation of these goods at a reduced duty rate and supporting the policy objective of promoting efficient trade practices and economic benefits.
Scope and Application
The Tariff Concession Instrument No. 1054469, made under the Customs Act 1901, applies to the specific instance of Biopak Pty Ltd's application for tariff concession on certain plastarch material disposable cutlery. The application was submitted on 14 December 2010, and the order, TCO No. 1054469, was issued on 7 March 2011. This instrument allows for a lower rate of customs duty, specifically making it free, for the specified cutlery items, which would otherwise attract a general rate of 5% under the Customs Tariff Act 1995. The instrument applies to the entities directly involved in the importation and production of the specified goods, providing them with the benefit of tariff concessions. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria as stipulated under sections 269C and 269SJ of the Act. The geographic reach of this instrument is effectively national, as it pertains to customs duties applied across Australia. However, it is important to note that the order does not affect any pre-existing rights or impose new liabilities on any parties, ensuring that it only benefits the importers of the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901, specifically relating to Tariff Concession Orders (TCOs), include sections 269C, 269F, 269SJ, and 269P(3). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning goods. Section 269C requires that for the CEO to consider the application, it must meet the core criteria, which include the condition that no substitutable goods were produced in Australia on the day the application was lodged. Section 269SJ lists goods that cannot be subject to a TCO, while section 269P(3) mandates that if the CEO is satisfied with the application, they must make a written order declaring the goods to which a prescribed tariff item applies.
Under the Act, the CEO has specific obligations when processing a TCO application. If the application is valid and does not pertain to goods listed in section 269SJ, the CEO must assess whether it meets the core criteria as defined in section 269C. If the application meets these criteria, the CEO must issue a written TCO. Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons why the TCO should not be granted. If no submissions are received, the CEO proceeds with the order. The TCO's commencement date is the date the application was lodged, as per subsection 269S(1).
The legislation imposes several requirements on the parties involved. The applicant must ensure their application is valid and meets the core criteria, which involves demonstrating that no substitutable goods were produced in Australia. The CEO is responsible for assessing applications, making written orders where appropriate, and publishing notices in the Gazette to invite public submissions. The CEO must also ensure that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO. Importers who have imported the goods since the TCO's effective date can apply for a refund of duty under the Regulations.
The Customs Act 1901 and associated regulations outline several consequences for non-compliance with the provisions related to TCOs. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can result in both civil and criminal penalties. Civil penalties may include fines, while criminal penalties can include imprisonment. The maximum penalties depend on the nature and severity of the breach but can be substantial under Australian law. The Act ensures that the rights of importers are protected and that no person is disadvantaged by the TCO except the Commonwealth.