EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502568
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 sheets on 24 February 2005.
Instrument
TCO No 0502568 was made on 20 May 2005. It declares that those certain cork 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.0502568 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 Tariff Concession Instrument No. 0502568, enacted in 2005, amends the Customs Act 1901 to provide tariff concessions for certain goods, specifically certain cork sheets in this instance. This legislation was introduced to address the issue of ensuring fair and competitive access to international markets for Australian industries by allowing the Chief Executive Officer of Customs to reduce customs duties on goods that are not produced domestically or for which there are no suitable substitutes available in Australia. The instrument was developed under the authority granted by section 269F of the Customs Act 1901, and the objective is to promote trade efficiency and economic growth by reducing the cost of importing specific goods.
The instrument was enacted by the relevant legislature, following an application by Portugal Cork Co Pty Ltd for tariff concessions on certain cork sheets. The process involved ensuring that no substitutable goods were produced in Australia, as required by section 269C of the Act. The instrument came into force on the date of the application, 24 February 2005, and no submissions were received in opposition to the concession. Importantly, the tariff concession does not disadvantage any existing rights of persons other than the Commonwealth and imposes no new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0502568, pursuant to the Customs Act 1901, applies to specific cork sheets that are subject to a Tariff Concession Order (TCO) issued by the Chief Executive Officer of Customs. This legislation is directed at entities, specifically Portugal Cork Co Pty Ltd in this case, that apply for and receive tariff concessions for goods that are not produced in Australia in the ordinary course of business. The TCO lowers the duty rate on these goods from the general rate of 5% to 0%, benefiting importers of these specific cork sheets. The instrument's jurisdictional reach is national, operating under the Commonwealth's authority as outlined in the Customs Act 1901. The TCO does not disadvantage any person by affecting their rights as of the date of registration and does not impose any liabilities on any person, except the Commonwealth. The TCO came into effect on the day the application was lodged, 24 February 2005, and any subsequent submissions or exemptions are managed under the subordinate instruments of the Act.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0502568 include section 269C, which outlines the core criteria for a Tariff Concession Order (TCO) application to be approved, and section 269P(3), which mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets these criteria, they must make a written order declaring that the goods in question are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995. Section 269K(1) also requires the CEO to publish a notice in the Gazette once an application is accepted, inviting submissions from any interested parties. The instrument specifically addresses the application of a 0% duty rate to certain cork sheets, as outlined in item 50 of Schedule 4, whereas the general rate of duty for these goods is 5%.
Under this legislation, the CEO has a duty to review applications for TCOs and determine whether they meet the core criteria, which includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets the criteria, they must issue a TCO as specified. Additionally, the CEO is obligated to publish a notice in the Gazette to allow for any submissions from interested parties, although in this case, no submissions were received. The TCO is considered effective from the date the application was lodged, which in this instance is 24 February 2005.
Failure to comply with the requirements set out in the Customs Act 1901 and the accompanying regulations can lead to various civil and criminal consequences. While the explanatory statement does not detail specific offences or penalties, breaches of customs laws generally may result in penalties under the Customs Act, which can include fines and imprisonment for serious offences. The exact penalties depend on the nature and severity of the breach, and these are typically outlined in the Customs Act and related regulations.
This TCO does not affect the rights of any person as of the date of registration, ensuring that no one (other than the Commonwealth) is disadvantaged or incurs liabilities for actions taken before the TCO's effective date. Importers of the specified goods benefit from this TCO as they can apply for a refund of duty paid on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, this TCO does not impose any new liabilities on any person.