EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413764
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.
Hot Shots (Aust) Pty Ltd applied for a TCO in respect of certain novelty tins on 21 December 2004.
Instrument
TCO No 0413764 was made on 4 March 2005. It declares that those certain novelty tins 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. 0413764 is taken to have come into force on 21 December 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, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme aims to address the problem of ensuring that certain imported goods receive a reduced rate of customs duty when no substitutable goods are produced in Australia. Specifically, section 269C of the Act mandates that a TCO application meets the core criteria if, on the date the application is lodged, no substitutable goods are produced domestically. This concession is intended to benefit importers by lowering their duty obligations, provided that the goods in question do not fall under the restricted category specified in section 269SJ of the Act. The TCO mechanism also ensures that any rights of parties are preserved and that no new liabilities are imposed on them as a result of the concession.
Scope and Application
The Tariff Concession Instrument No. 0413764 applies to persons or entities seeking a reduction in customs duty on specific goods as per the Customs Act 1901. This legislation allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to applicants who demonstrate that the goods in question are not produced in Australia and do not have substitutable goods produced domestically. The instrument particularly benefits importers by potentially reducing the customs duty rate on novelty tins, as outlined in the Customs Tariff Act 1995. This Act's reach is Commonwealth-wide, impacting importers and the goods they bring into Australia. There are, however, exclusions for goods specified in section 269SJ of the Customs Act 1901 which cannot be subject to a TCO. The TCO itself does not retroactively affect the rights or liabilities of any person except the Commonwealth, ensuring that only future transactions benefit from the reduced duty rates.
Key Provisions
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be issued to lower the rate of customs duty on certain goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application is valid and meets the core criteria under section 269C, a TCO can be issued. This means that the goods subject to the TCO will be subject to a lower rate of duty than the general rate specified in the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the applicant and the CEO. The applicant must ensure that the goods they are applying for a TCO on are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must determine whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets the criteria, they are required to make a written order (the TCO) declaring the goods to which a prescribed item of Schedule 4 to the Tariff applies.
Under the Customs Act 1901, there are no specific offences or penalties outlined for breaching the requirements of a TCO. However, the Act does provide for general penalties for breaches of customs laws, which can include fines and imprisonment. The maximum penalties can vary depending on the nature and severity of the breach. The Tariff Concession Instrument No. 0413764, for example, was made on 4 March 2005, and it declares that certain novelty tins are subject to a lower rate of duty under item 50 of Schedule 4 to the Tariff. The CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. In this case, no submissions were received.
The Tariff Concession Order is effective from the date the application for the TCO was lodged, as per subsection 269S(1). This means that the lower rate of duty applies retroactively to the date of the application, and importers can apply for a refund of duty on goods imported since that date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration.