EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502567
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.
Portugal Cork Co Pty Ltd applied for a TCO in respect of certain cork tiles and/or sheets on 24 February 2005.
Instrument
TCO No 0502567 was made on 20 May 2005. It declares that those certain cork tiles and/or sheets 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 0%.
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.0502567 is taken to have come into force on 24 February 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, enacted by the Australian Parliament, addresses the need for streamlined processes to manage and facilitate international trade by allowing for tariff concessions on specific goods. The Act establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that reduce the customs duty on certain goods, provided they meet specific criteria. This initiative aims to promote trade efficiency and economic benefits by reducing the cost burden on importers. Tariff Concession Instrument No. 0502567, issued on 20 May 2005, exemplifies this process by granting a zero percent duty rate on certain cork tiles and sheets, effectively reducing the general rate of duty from 5 percent. The policy objective of this measure is to support the import of these goods by lowering costs, thereby encouraging trade and potentially stimulating economic activity associated with the use of these materials.
Scope and Application
The Tariff Concession Instrument No. 0502567 is an instrument under the Customs Act 1901, which applies to entities or individuals seeking tariff concessions for certain goods. Specifically, this instrument pertains to Portugal Cork Co Pty Ltd's application for tariff concessions on certain cork tiles and sheets, following the application's lodgement on 24 February 2005. The instrument grants a concession by reducing the duty on these specified goods from the general rate of 5% to 0%, effective from the date of the application's lodgement. The Act applies to these goods within the Commonwealth of Australia, and the concession is made pursuant to the Customs Tariff Act 1995. The instrument does not affect any pre-existing rights of parties other than the Commonwealth and does not impose any liabilities on any person. Notably, it excludes any goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. The instrument can be extended or restricted through subordinate instruments as specified under the Customs Act 1901.
Key Provisions
The key provisions of this instrument, Tariff Concession Instrument No.0502567, are primarily governed by sections 269C, 269P, and 269S of the Customs Act 1901. Section 269C stipulates the core criteria that an application for a Tariff Concession Order (TCO) must meet, which includes the absence of substitutable goods produced in Australia at the time the application is lodged. Section 269P outlines the process for the Chief Executive Officer of Customs (CEO) to make a TCO if the application meets these criteria. Finally, section 269S addresses the effective date of the TCO, stating that it comes into force on the date the application was lodged.
In accordance with these provisions, the CEO is required to assess the application against the criteria set out in section 269C, specifically ensuring no substitutable goods were produced in Australia on the application date. If these criteria are met, the CEO must issue a written TCO (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit any objections to the TCO (subsection 269K(1)). In this instance, no submissions were received.
Failure to comply with the requirements of the Customs Act 1901 may result in legal consequences. The Act does not explicitly state offences or penalties for non-compliance with TCOs; however, breaches of the Customs Act generally can lead to civil and criminal penalties, including fines and imprisonment. The maximum penalties for customs-related offences are detailed in section 236 of the Customs Act, which can include fines up to $22,000 and/or imprisonment for up to five years for individuals, and higher penalties for corporations. Importers can also apply for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person other than the Commonwealth or impose liabilities on anyone for actions taken before the TCO was registered.