EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514071
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.
DLI Australia Pty Ltd applied for a TCO in respect of certain Travel or Overnight or Carry Bags on 12 October 2005.
Instrument
TCO No 0514071 was made on 3 January 2006. It declares that those certain Travel or Overnight or Carry 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 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. 0514071 is taken to have come into force on 12 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, establishes a framework for the imposition of customs duties on imported goods. One of the key mechanisms within this framework is the ability to make Tariff Concession Orders (TCOs), which allow for a reduction in customs duty for specific goods. The Tariff Concession Instrument No. 0514071, made on 3 January 2006, addresses a gap in the application of customs duties by providing tariff concessions for certain Travel or Overnight or Carry Bags, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia. The policy objective behind this concession is to facilitate the importation of these goods at a reduced duty rate, thereby potentially benefiting importers and consumers by lowering the cost of these items.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) that lower the customs duty on specified goods, administered by the Chief Executive Officer of Customs (CEO). The legislation applies to any person who can apply for a TCO on behalf of goods that meet the core criteria, particularly if no substitutable goods are produced in Australia in the ordinary course of business. This Act has a Commonwealth reach, governing the process at the national level but potentially affecting importers across all states and territories. The TCO No. 0514071, issued under this Act, specifically relates to certain Travel or Overnight or Carry Bags, reducing the customs duty from 5% to 0%, and came into effect on the date the application was lodged, 12 October 2005. The Act does not specify exclusions or thresholds beyond the criteria set out in sections 269C and 269SJ, and subordinate instruments may further refine the application of the Act.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0514071 (section 269C, 269P, and 269S) require the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) if an application for such an order meets the core criteria, specifically that no substitutable goods are being produced in Australia. This instrument was made on 3 January 2006, declaring that certain Travel or Overnight or Carry Bags, which are the subject of the TCO application, are subject to a 0% duty rate as opposed to the general 5% duty rate (section 269P(3)). The TCO came into effect on 12 October 2005, the date the application was lodged (section 269S(1)).
Obligations under this Act primarily rest on the CEO of Customs, who must decide whether an application for a TCO meets the core criteria and publish a notice in the Gazette inviting submissions from interested parties (subsection 269K(1)). If the CEO is satisfied that the application meets the core criteria and no submissions are received, the CEO must make a TCO. The CEO must also ensure that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO. Importers of goods subject to the TCO will benefit as they can apply for a refund of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).
Any breach of the Customs Act 1901 or the Tariff Concession Instrument No. 0514071 can lead to various civil and criminal penalties. Under section 253 of the Customs Act 1901, a person can be fined up to 10,000 penalty units or imprisoned for five years, or both, for contravening the Act. Additionally, section 269M of the Act provides that any person who contravenes a TCO or a condition of a TCO can be fined up to 10,000 penalty units or imprisoned for five years, or both. A person who makes a false statement or representation in an application for a TCO can also be subject to penalties under section 269N of the Act, which includes fines up to 10,000 penalty units or imprisonment for five years, or both. The Act also allows for the seizure and forfeiture of goods that are the subject of a breach.