EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512267
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.
Venus Hartung Pty Ltd applied for a TCO in respect of certain Self Adhesive Tape on 20 September 2005.
Instrument
TCO No 0512267 was made on 16 December 2005. It declares that those certain Self Adhesive Tape 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. 0512267 is taken to have come into force on 20 September 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 Parliament of Australia, provides a framework for the administration of customs and excise through the creation of Tariff Concession Orders (TCOs). The Act was introduced to address the need for a flexible mechanism to adjust tariff rates on specific goods based on certain criteria, thereby facilitating trade and economic policy objectives. Specifically, the Act allows the Chief Executive Officer of Customs to grant tariff concessions to goods that meet specific conditions, such as the absence of substitutable goods produced in Australia. In the case of Tariff Concession Order No. 0512267, the CEO granted a concession to Venus Hartung Pty Ltd for certain self-adhesive tapes, reducing the duty rate from 5% to 0%, effective from 20 September 2005. This concession was made after it was determined that no substitutable goods were produced in Australia, aligning with the policy objective of promoting trade by reducing barriers for specific goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which applies to goods eligible for lower rates of customs duty. These orders are subject to an application process wherein a person can apply for a TCO provided the goods in question are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. For an application to be considered, it must meet the core criteria, which include the absence of substitutable goods produced in Australia on the date the application is lodged. This is defined under sections 269C, 269D, 269E, and 269F of the Act, which outline the conditions for what constitutes goods produced in Australia, ordinary course of business, and substitutable goods. Once the application meets these criteria, the CEO must issue a written order, effectively reducing the customs duty on the specified goods. The geographic reach of this legislation is national, affecting all importers of the specified goods across Australia. The explanatory statement details a specific case where Venus Hartung Pty Ltd successfully applied for a TCO on certain Self Adhesive Tape, resulting in a reduction of customs duty from 5% to 0% as per item 50 of Schedule 4 to the Customs Tariff Act 1995. The commencement of the TCO is effective from the date the application was lodged, and it does not retroactively disadvantage any person or impose liabilities on anyone for actions prior to the registration date.
Key Provisions
The Tariff Concession Instrument No. 0512267 (TCO No. 0512267) made under section 269F of the Customs Act 1901 (the Act) provides a concession on the rate of customs duty for certain Self Adhesive Tape. The general rate of duty on these goods is 5%, but the TCO reduces this rate to 0% (sections 269C and 269P(3)). The TCO applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). This concession is effective from the date the application for the TCO was lodged, which is 20 September 2005 (subsection 269S(1)). This date marks the commencement of the TCO, and any goods imported on or after this date are eligible for the reduced duty rate.
The Act imposes certain obligations on both the Chief Executive Officer of Customs (the CEO) and the applicant for a TCO. The CEO must first assess whether the application for a TCO meets the core criteria set out in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269P(3)). If the CEO is satisfied that the application meets these criteria, the CEO must then make a written order declaring that the goods in question are subject to the prescribed tariff concession (subsection 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to submit their reasons (subsection 269K(1)). In this case, no submissions were received.
Under the Customs Act 1901, the TCO does not adversely 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 (subsection 269S(4)). The TCO is designed to benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations). The TCO is intended to provide a tariff concession without imposing any additional burdens or liabilities on affected parties.
There are no specific offences or penalties mentioned in the Act for breaching the provisions related to TCOs. However, any failure by the CEO to properly assess and process a TCO application could potentially lead to legal challenges or administrative reviews. Importers who do not comply with the conditions for applying for a refund of duty could face civil consequences, including the denial of their refund application. The Act does not specify any maximum penalties for breaches, but any legal action arising from non-compliance would be subject to the general provisions of Australian law.