EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513494
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.
Labelnames applied for a TCO in respect of certain decals in rolls on 5 October 2005.
Instrument
TCO No 0513494 was made on 3 March 2006. It declares that those certain decals in rolls 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 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. One submission objecting to the TCO application was received from Calgraphics.
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. 0513494 is taken to have come into force on 5 October 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, established a framework for imposing customs duties on imported goods. This Act was designed to regulate the importation of goods into Australia and to raise revenue through the imposition of duties. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act aimed to address specific economic or policy needs by providing relief from customs duty on certain goods. This legislative mechanism enables the Chief Executive Officer of Customs to grant tariff concessions to applicants if certain criteria are met, such as the absence of substitutable goods produced in Australia. TCO No. 0513494, made on 3 March 2006, exemplifies this process, as it was issued following an application for tariff concessions on certain decals in rolls, resulting in a reduction of duty from 5% to free, effective from 5 October 2005. The instrument was subject to public consultation, with an objection lodged by Calgraphics, and it came into force on the date of the application, beneficially impacting the rights of importers who may now seek duty refunds.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which apply lower rates of customs duty on specified goods. The process commences with an application to the CEO by a person seeking a TCO for goods not listed in section 269SJ, which prohibits certain goods from being subject to a TCO. The CEO evaluates whether the application meets the core criteria, which include the absence of substitutable goods produced in Australia at the time of application, as defined in section 269C. If the CEO determines that the application meets these criteria, they must issue a TCO, specifying the applicable tariff from Schedule 4 of the Customs Tariff Act 1995. For example, TCO No. 0513494 pertains to certain decals in rolls, setting their duty rate at free, whereas the general rate is 5%. This TCO came into effect on 5 October 2005, the date the application was lodged, and does not retroactively disadvantage or impose liabilities on importers prior to its registration. Importers can benefit from this TCO by applying for duty refunds on goods imported since its effective date.
Key Provisions
The main operative sections of this legislation focus on the process of applying for and granting Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269C). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Once an application is deemed valid, the CEO must determine if the application meets the core criteria, specifically whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
The obligations and requirements imposed by this Act include the CEO’s duty to consult with interested parties before making a TCO. As per subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. In the case of TCO No. 0513494, an objection was received from Calgraphics. Furthermore, the Act mandates that once a TCO is registered, it comes into force on the day the application for the TCO was lodged, thereby ensuring that the rights of importers are beneficially affected (subsection 269S(1)). Importers of the affected goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations.
Under the Customs Act 1901, any breach of the conditions or requirements of a TCO can lead to civil or criminal consequences. While the specific offences and penalties are not detailed in this legislation, breaches of customs laws generally can result in substantial fines and imprisonment. The exact penalties depend on the nature and severity of the breach, as well as other relevant laws and regulations governing customs duties and tariff concessions. Importers or entities that fail to comply with the terms of a TCO could face legal actions, including enforcement actions by the Australian Border Force or the Australian Customs and Border Protection Service.