EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0412190
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.
James Walker Australia Pty Ltd applied for a TCO in respect of certain rubber bonded corks on 11 November 2004.
Instrument
TCO No 0412190 was made on 1 February 2005. It declares that those certain rubber bonded corks 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 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. 0412190 is taken to have come into force on 11 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 was enacted by the Australian Parliament to regulate the importation and exportation of goods within Australia. The introduction of Part XVA in the Act established a scheme allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for certain goods, thereby reducing the customs duty rates applicable to them. This scheme was introduced to address the need for a mechanism to provide tariff concessions to importers based on specific criteria, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0412190, made on 1 February 2005, exemplifies this process by reducing the duty rate for certain rubber bonded corks from 5% to 3%, effective from 11 November 2004, the date the application was lodged. This reduction was implemented after it was determined that no substitutable goods were produced in Australia, satisfying the core criteria under section 269C of the Act. The TCO did not disadvantage any person other than the Commonwealth and allowed importers to apply for duty refunds for goods imported since the commencement date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0412190, made under section 269F of the Customs Act 1901, applies to goods specified in the application for a Tariff Concession Order (TCO), with the primary focus being on rubber bonded corks in this instance. The Act allows for a lower rate of customs duty for goods that are subject to a TCO, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The CEO of Customs has the authority to make such orders, and the process involves evaluating the application against the core criteria set out in the Act, which includes ensuring that the goods in question are not prohibited from TCOs. The geographic reach of this legislation is national, as it pertains to the Customs Act, which applies across Australia. The application of the TCO is restricted to goods that meet the specified criteria, and there are no exemptions or exclusions noted in this particular instrument, although the general framework of the Customs Act may include other exclusions. The commencement of the TCO is retroactive to the date the application was lodged, ensuring that the rights of importers are protected from the date of application.
Key Provisions
The primary sections of the Customs Act 1901 governing Tariff Concession Orders (TCOs) are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. Section 269C stipulates that an application meets the core criteria if no substitutable goods were produced in Australia on the date the application was lodged, as defined in section 269D. If the CEO determines that the application meets these criteria, a TCO must be issued under section 269P. This order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a reduced rate of duty.
The Act imposes several obligations on the parties involved. The CEO must assess whether an application meets the core criteria, defined by the absence of substitutable goods produced in Australia on the application date. The CEO must also publish a notice in the Gazette inviting submissions if there are concerns about the TCO, although this step is not mandatory if no submissions are received. Importers benefit from the TCO by being able to apply for a refund of duty on goods imported since the TCO's effective date under regulation 126(1)(r) of the Customs Regulations 1993. Additionally, the TCO does not impose any liabilities on any person, including importers, regarding actions taken before the TCO's effective date.
Breaches of the Customs Act 1901 or associated regulations can result in both civil and criminal penalties. Civil penalties may include fines, compensation, and orders for restitution, depending on the specific breach and its impact. Criminal penalties can include imprisonment and/or fines, with the maximum penalties varying based on the severity and intent behind the breach. For example, under section 265, a person found guilty of an offence involving fraud or misrepresentation could face a penalty of up to 10 years imprisonment or a fine of up to 10,000 penalty units, or both. These penalties are designed to enforce compliance and deter non-compliance with the provisions of the Act.