EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608962
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.
Hale Imports applied for a TCO in respect of certain polypropylene plaited placemats on 24 May 2006.
Instrument
TCO No 0608962 was made on 04 August 2006. It declares that those certain polypropylene plaited placemats 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. 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. 0608962 is taken to have come into force on 24 May 2006.
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, serves as the foundational legal framework for regulating customs and excise duties in Australia. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide for reduced customs duty rates on certain goods. This legislative tool was introduced to address the need for targeted tariff reductions to promote trade and economic efficiency by reducing the cost of imported goods. Tariff Concession Instrument No. 0608962, issued on 4 August 2006, is an example of this mechanism in action, providing a tariff concession for certain polypropylene plaited placemats, effectively reducing their duty from 5% to free. The instrument was introduced without any public submissions opposing it, and it came into force on the date the application was lodged, 24 May 2006, without retroactively affecting any pre-existing rights or liabilities.
Scope and Application
The Tariff Concession Instrument No. 0608962 applies to the specific goods, namely certain polypropylene plaited placemats, which are subject to a Tariff Concession Order (TCO) under the Customs Act 1901. This legislation pertains to entities and individuals who are involved in the importation of these goods, particularly importers who stand to benefit from the reduced customs duty rate as a result of the TCO. The Act operates on a national level as it is an instrument of the Commonwealth of Australia. The TCO exempts the specified goods from the general rate of customs duty, setting their duty rate at free, provided the application for the TCO meets the core criteria outlined in the Customs Act 1901. Notably, the Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which are ineligible for a TCO. The scope of the TCO can be further extended or modified through subordinate instruments, although this particular TCO does not impose any liabilities on any person and protects the rights of the Commonwealth and third parties.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0608962 include section 269C (269F) of the Customs Act 1901, which allows for the application of Tariff Concession Orders (TCOs) for certain goods not produced in Australia. Section 269P(3) specifies the process for the Chief Executive Officer (CEO) of Customs to make a TCO when satisfied that the application meets the core criteria, such as the absence of substitutable goods produced in Australia. Section 269S(1) governs the commencement of the TCO, which is effective from the date of the application. The TCO provides for the specific goods to be subject to a lower rate of customs duty, as outlined in the Tariff Concession Instrument.
Under this legislation, the obligations for parties include the requirement for applicants to ensure their applications meet the core criteria, specifically that no substitutable goods are produced in Australia. The CEO must review the application and make a decision based on the information provided. The CEO also has a duty to publish a notice in the Gazette inviting any submissions from interested parties who may oppose the TCO. In the case of TCO No. 0608962, no submissions were received, and the CEO proceeded to issue the TCO. Importers must also comply with the TCO by ensuring they apply for any duty refunds applicable to goods imported since the TCO came into force.
Breaching the conditions of a TCO or failing to comply with the obligations set out in the Customs Act 1901 can result in civil or criminal penalties. For example, if a person knowingly provides false or misleading information in an application for a TCO, they may face fines or imprisonment as stipulated by the relevant sections of the Act. The maximum penalties can vary depending on the severity of the breach, but they include substantial fines and potential imprisonment terms as outlined in the Act. Additionally, non-compliance with the duty refund provisions may lead to financial liabilities for importers, although the TCO itself does not impose any new liabilities.