EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411928
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.
Coates Brothers Aust Pty Ltd applied for a TCO in respect of certain printing ink on 10 November 2004.
Instrument
TCO No 0411928 was made on 14 January 2005. It declares that certain printing ink 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 3%.
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 initiation.
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. 0411928 is taken to have come into force on 10 November 2004.
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 regulation of customs and excise, including the imposition of customs duty on imported goods. One specific feature of this Act is the provision for Tariff Concession Orders (TCOs), which can reduce the rate of customs duty on certain imported goods. The Customs Act 1901 was amended to include this mechanism to address the problem of ensuring that Australian industries do not face undue competitive disadvantages due to the high cost of imported goods. The policy objective behind this provision is to promote fair trade practices by allowing for tariff reductions on goods where no suitable Australian-made alternatives exist. The Tariff Concession Instrument No. 0411928, made under the authority of the Customs Act 1901, exemplifies this mechanism by granting a tariff concession on certain printing inks, reducing the duty rate from 5% to 3% for these goods.
Scope and Application
The Customs Act 1901, as amended, includes provisions under Part XVA that facilitate the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide reduced rates of customs duty on specified goods. This legislative framework applies to any person or entity that seeks to import goods eligible for tariff concessions. The Act operates nationally, extending its reach across all jurisdictions within Australia, thereby ensuring uniformity in the application of tariff concessions. The process involves an application to the CEO, followed by an assessment against core criteria to determine eligibility for a TCO. Notably, certain goods specified in section 269SJ of the Act are excluded from TCOs, such as goods that pose a risk to health, safety, or the environment, or those that are subject to specific prohibitions. The application of TCOs is further refined through subordinate instruments, which may include regulations or guidelines that provide detailed procedural and substantive requirements for TCOs. The explanatory statement for Instrument No. 0411928 illustrates this process, detailing how a TCO was granted for specific printing inks, reducing their duty rate from 5% to 3% upon application by Coates Brothers Aust Pty Ltd.
Key Provisions
The key operative sections of the Customs Act 1901, specifically under Part XVA, establish the framework for Tariff Concession Orders (TCOs) as outlined in section 269F. An application for a TCO can be submitted by a person to the Chief Executive Officer of Customs (CEO), as per section 269F. If the CEO determines that the application pertains to goods not excluded by section 269SJ and meets the core criteria outlined in section 269C, the CEO is required to issue a written order declaring the goods to which the TCO applies. This order specifies the prescribed item of Schedule 4 to the Customs Tariff Act 1995 and the applicable duty rate. For instance, in TCO No. 0411928, the CEO determined that certain printing ink was subject to a duty rate of 3% instead of the general rate of 5%.
The obligations imposed by the Act on the parties it governs are primarily centred around the application and assessment process for TCOs. The CEO must ensure that applications are assessed against the criteria in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date of application. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from interested parties regarding the proposed TCO. In the case of TCO No. 0411928, no submissions were received, indicating that the application met all the necessary requirements and criteria.
Offences and penalties for breaches of the Customs Act 1901 and associated regulations are not explicitly detailed within the explanatory statement provided. However, it is implied that failure to comply with the Act's provisions, such as incorrectly applying for a TCO or submitting false information, could result in legal consequences. These might include fines or other penalties as stipulated under relevant sections of the Act or associated regulations. For instance, the CEO’s decision-making process is critical, and any wrongful or negligent decisions could be subject to review or legal action. The exact penalties would depend on the specific breach and applicable sections of the Act.