EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516781
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.
Watill Investments Pty Ltd applied for a TCO in respect of certain clothes pegs bags on 9 December 2005.
Instrument
TCO No 0516781 was made on 27 March 2006. It declares that those certain clothes pegs 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 7.5%. 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. 0516781 is taken to have come into force on 9 December 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. 0516781, enacted in 2006, is a measure introduced to address the need for tariff concessions on specific goods under the Customs Act 1901. The Act facilitates the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on goods specified in such orders. This legislative instrument was developed in response to the need for a streamlined process that ensures certain goods, which are not substitutable by Australian-made products, receive tariff benefits. The Customs Act 1901, enacted by the Australian Parliament, provides the framework for the administration of customs and excise, including the ability for the CEO to issue TCOs under section 269F. The policy objective of this particular instrument, as outlined in the explanatory statement, is to grant a tariff concession to certain clothes pegs bags, reducing the duty rate from 7.5% to 0% when no substitutable goods are produced in Australia.
Scope and Application
The Tariff Concession Instrument No. 0516781 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions for specific goods, ensuring they meet the criteria outlined in the Act. The legislation mandates that the Chief Executive Officer of Customs must evaluate applications to confirm that the goods in question are not substitutable by Australian-produced goods and that they correspond with the uses specified in the application. This instrument specifically pertains to the reduction of customs duty for certain clothes pegs bags, setting the duty rate at 0% instead of the general rate of 7.5%. The scope of the Act is Commonwealth-wide, applying uniformly across Australia, and the Act allows for the use of subordinate instruments to further define or modify its application. No exclusions or exemptions are specified within the text of this particular instrument, although certain goods are inherently ineligible for tariff concessions as per section 269SJ of the Act. The commencement of this TCO is effective from the date the application was lodged, 9 December 2005, and it does not retroactively affect any pre-existing rights or impose liabilities on any person for actions taken prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 0516781, made under section 269F of the Customs Act 1901, pertains to the granting of Tariff Concession Orders (TCOs) for certain clothes pegs bags. A TCO is a written order made by the Chief Executive Officer of Customs (CEO) that declares the goods in question are to be subject to a lower rate of customs duty, as specified in the Customs Tariff Act 1995. In this case, the instrument declares that the particular clothes pegs bags are subject to item 50 of Schedule 4 to the Tariff, reducing the general duty rate of 7.5% to 0% (section 269P(3)).
The Act imposes several obligations on the CEO and those applying for a TCO. Firstly, the CEO must ensure that the application is valid and does not pertain to goods that cannot be subject to a TCO, as outlined in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria—specifically, that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C)—the CEO is required to make the written order (section 269P(3)). The CEO must also publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made, as stipulated in subsection 269K(1) of the Act. In this instance, the CEO did not receive any submissions.
Section 269S(1) of the Act stipulates that a TCO is to be taken as coming into force on the day the application was lodged. Hence, TCO No. 0516781 is deemed to have come into effect on 9 December 2005. Importantly, the TCO does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth, as per the provisions of the Act. Importers of the affected goods will benefit from the TCO, potentially applying for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 or the terms of the TCO could result in various civil or criminal consequences. Although the explanatory statement does not detail specific offences or penalties, breaches of customs regulations generally can attract significant penalties, including fines and imprisonment. For example, under section 270 of the Customs Act, a person who makes a false or misleading statement in an application for a TCO could face a penalty of up to $22,200 or imprisonment for up to two years, or both, if convicted in a court. Additionally, any individual or entity found to be evading customs duties could face severe penalties, including substantial fines and potential imprisonment. The specific penalties would depend on the nature and severity of the breach.