EXPLANATORY STATEMENT
Tariff Concession Instrument No.0412873
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.
OE & DR Pope Pty Ltd applied for a TCO in respect of certain tubular woven and/or back seam bags on 29 November 2004.
Instrument
TCO No 0412873 was made on 4 February 2005. It declares that those certain tubular woven and/or back seam bags 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 10%. 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.0412873 is taken to have come into force on 29 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 Tariff Concession Instrument No. 0412873, enacted in 2005, is a measure under the Customs Act 1901 designed to address the issue of applying tariff concessions to specific goods imported into Australia. This instrument was introduced to provide relief to importers by reducing the customs duty on certain goods, thereby facilitating smoother trade operations. The enacting body responsible for this instrument is the Chief Executive Officer of Customs, who exercises their authority under Section 269F of the Customs Act 1901. The policy objective behind this concession is to support importers by reducing the duty on certain tubular woven and/or back seam bags from 10% to 3%, provided that no substitutable goods are produced in Australia, thereby promoting a more competitive import market. The application process involved a review of the core criteria, as outlined in the Act, ensuring that the tariff concessions were applied appropriately and fairly.
Scope and Application
The Tariff Concession Instrument No. 0412873 under the Customs Act 1901 applies to entities seeking tariff concessions for specific goods, in this case, tubular woven and/or back seam bags, that are imported into Australia. The act facilitates lower rates of customs duty for these goods if certain criteria are met, as determined by the Chief Executive Officer of Customs. This concession is applicable on a national level, impacting all importers of these goods across the country. The instrument does not affect pre-existing rights of persons or entities except for the Commonwealth, nor does it impose any liabilities on any person for actions taken prior to the instrument's registration. Exemptions or exclusions are limited to goods specified in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. The instrument was made under section 269F and came into force on the date of the application, 29 November 2004, and can be extended or modified through subordinate instruments as necessary.
Key Provisions
The Customs Act 1901 (the Act) under Part XVA allows the Chief Executive Officer of Customs (the CEO) to issue Tariff Concession Orders (TCOs) for specific goods, which then apply a lower rate of customs duty. According to section 269F, an application for a TCO can be made by any person to the CEO, provided the goods are not those listed in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application meets the core criteria, as outlined in section 269C, they are required to issue a TCO. The core criteria include ensuring that on the day the application was made, no substitutable goods were being produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
Once a TCO is issued, the goods subject to the order are subject to a reduced duty rate as specified in Schedule 4 to the Customs Tariff Act 1995. This was the case for OE & DR Pope Pty Ltd, who applied for a TCO on 29 November 2004 for certain tubular woven and/or back seam bags. The CEO issued TCO No. 0412873 on 4 February 2005, applying a duty rate of 3% instead of the general rate of 10%. The CEO is obligated to publish a notice in the Gazette after accepting a TCO application as valid, inviting submissions from any interested parties who may object to the TCO. In this case, no submissions were received, indicating no objections were raised.
Section 269S(1) of the Act stipulates that a TCO takes effect from the date the application was lodged, meaning TCO No. 0412873 was effective from 29 November 2004. Importantly, the TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, ensuring that it does not disadvantage anyone or impose new liabilities for actions taken before the TCO's registration date. Importers, however, can benefit by applying for duty refunds for goods imported since the effective date of the TCO, as per paragraph 126(1)(r) of the Regulations.
Breaching the conditions of a TCO can lead to significant legal consequences. Under the Customs Act 1901, there are specific offences and penalties for non-compliance. For instance, knowingly making false statements or representations in an application for a TCO can result in criminal charges. The maximum penalty for such offences can include fines and imprisonment, depending on the severity of the breach. Additionally, civil penalties may apply for any financial losses incurred due to fraudulent or negligent actions related to the TCO, including potential court-ordered restitution or damages. Compliance with the TCO conditions is therefore crucial to avoid these legal repercussions.