EXPLANATORY STATEMENT
Tariff Concession Instrument No.0501210
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 box shaped bags on 31 January 2005.
Instrument
TCO No 0501210 was made on 29 April 2005. It declares that those certain box shaped 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. 0501210 is taken to have come into force on 31 January 2005.
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 Parliament of Australia to establish a comprehensive framework for the regulation of customs and excise duties. It provides a mechanism for the Chief Executive Officer of Customs to grant tariff concession orders (TCOs) that lower the rate of customs duty on specified goods, provided certain criteria are met. This legislative instrument, known as Tariff Concession Instrument No. 0501210, was introduced to address the need for specific tariff concessions for certain goods, in this case, certain box-shaped bags, where the applicant, OE & DR Pope Pty Ltd, successfully demonstrated that no substitutable goods were produced in Australia. The policy objective behind this concession is to facilitate trade and potentially reduce costs for importers by lowering the duty on these specified goods from 10% to 3%, while ensuring that the rights of other stakeholders are not adversely affected.
Scope and Application
The Tariff Concession Instrument No. 0501210, made under the Customs Act 1901, pertains to the application of tariff concessions for specific goods. This legislation applies to any entity or individual that imports the specified box-shaped bags, which are the subject of Tariff Concession Order (TCO) No. 0501210. The instrument was made in response to an application by OE & DR Pope Pty Ltd on 31 January 2005, and it became effective from the same date. The geographic reach of this Act is national, as it applies across Australia and is governed by the Commonwealth. The Act excludes goods specified in section 269SJ of the Customs Act, which cannot be subject to a TCO. The process involves the Chief Executive Officer of Customs determining if the application meets the core criteria, particularly if no substitutable goods are produced in Australia. The TCO ensures that the general rate of duty for these specific goods is reduced from 10% to 3%, thereby benefiting the importers who can apply for a refund of the difference in duty. The Act does not disadvantage any person or impose liabilities for actions taken before the TCO's effective date.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0501210 (the Instrument) under the Customs Act 1901 (the Act) include sections 269C, 269F, and 269P. Section 269F allows for the application of Tariff Concession Orders (TCOs) by any person, while section 269C outlines the core criteria that must be met for such an application to be approved. Section 269P(3) mandates the Chief Executive Officer of Customs (the CEO) to issue a written TCO if the application meets these criteria. In this specific case, OE & DR Pope Pty Ltd applied for a TCO in respect of certain box-shaped bags on 31 January 2005, and the CEO issued Tariff Concession Order No. 0501210 on 29 April 2005, declaring that these goods are subject to a reduced customs duty rate under item 50 of Schedule 4 of the Customs Tariff Act 1995.
The Instrument imposes several obligations on the parties involved. Firstly, the applicant must ensure that the goods in question meet the core criteria set out in section 269C of the Act. This involves demonstrating that no substitutable goods were produced in Australia at the time the application was lodged. The CEO, on the other hand, is obligated to assess the application against these criteria and, if satisfied, to issue a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K(1) of the Act, although in this instance, no submissions were received.
Breaching the requirements of the Act can lead to various civil and criminal consequences. While the specific offences and penalties under the Customs Act 1901 are not detailed in the explanatory statement, it is known that non-compliance with customs regulations can result in penalties such as fines and, in severe cases, imprisonment. The precise penalties would depend on the nature and extent of the breach, but they can include substantial financial penalties. It is also important to note that the Instrument does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken prior to the registration date.
The Tariff Concession Order No. 0501210, effective from 31 January 2005, confers benefits to importers by reducing the customs duty rate on the specified box-shaped bags from the general rate of 10% to 3%. Importers can apply for a refund of the difference in duty paid on goods imported since the effective date of the TCO, as stipulated in paragraph 126(1)(r) of the Regulations. This concession aims to support the import of these goods by lowering the financial burden associated with customs duties, thereby potentially increasing their availability and affordability in the Australian market.