EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513209
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.
Central Machinery Exchange applied for a TCO in respect of certain sillage bags on
28 September 2005.
Instrument
TCO No 0513209 was made on 16 December 2005. It declares that those certain sillage 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 free.
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. 0513209 is taken to have come into force on 28 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 Tariff Concession Instrument No. 0513209, made under the Customs Act 1901, was enacted in 2005 to provide relief on customs duties for specific goods that meet certain criteria. This instrument was introduced to address the gap in the duty-free scheme for goods that are not substitutable by locally produced goods. The Central Machinery Exchange applied for a tariff concession order (TCO) concerning certain sillage bags, and following the assessment by the Chief Executive Officer of Customs, the instrument was issued on 16 December 2005, declaring these bags as goods to which the tariff item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a free rate of duty instead of the general rate of 10%. The policy objective was to ensure that no Australian businesses would be disadvantaged by the concession, while providing a benefit to importers who could claim a refund for duties paid on these goods from the date the TCO was deemed to come into effect.
Scope and Application
The Tariff Concession Instrument No. 0513209, made under section 269F of the Customs Act 1901, applies to any person who may apply to the Chief Executive Officer of Customs for a Tariff Concession Order (TCO) in respect of specific goods. This instrument was made in response to an application by Central Machinery Exchange for certain sillage bags, which are now subject to a lower rate of customs duty as a result of the order. The Act applies to the industry involved in the import of these specific goods and the conduct related to the importation of these goods. The geographic and jurisdictional reach of this Act is national, as it is an instrument of the Commonwealth of Australia under the Customs Act 1901. There are no exclusions, exemptions, or thresholds specified within this instrument, but section 269SJ of the Act sets out those goods that cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations made under the Customs Act 1901.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0513209 under the Customs Act 1901 (section 269F) pertain to the application and approval process for a Tariff Concession Order (TCO). Section 269F enables an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. The CEO is required to consider whether the application meets the core criteria set out in section 269C, which necessitates that no substitutable goods are produced in Australia at the time the application is lodged. If these criteria are satisfied, the CEO must then make a written order, a TCO, specifying that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995, thereby applying a lower rate of customs duty.
The Act imposes several obligations on the parties involved. The applicant must ensure that the application for a TCO is made in accordance with the provisions of section 269F, including providing all necessary information and documentation. The CEO, on receiving a valid application, must determine if it meets the core criteria as outlined in section 269C, and if satisfied, proceed to make the TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed, although in this case, no submissions were received. The CEO must also ensure that the TCO does not disadvantage any person or impose new liabilities on anyone in relation to actions taken before the TCO’s effective date.
In terms of legal consequences, the Customs Act 1901 does not specify particular offences or penalties for breaches related to the TCO process itself. However, general provisions within the Act may apply to breaches of customs regulations, which could include civil or criminal penalties. For instance, knowingly making a false statement in an application could result in penalties under section 243CA of the Act, which includes fines and imprisonment. The Act also provides for the imposition of penalties for non-compliance with customs duties, which could include financial penalties and other enforcement actions as deemed necessary by the CEO.