EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618149
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.
Australian Botanical Products Pty Ltd applied for a TCO in respect of certain fragrance formula dosers on 03 November 2006.
Instrument
TCO No 0618149 was made on 19 January 2007. It declares that those certain fragrance formula dosers 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. 0618149 is taken to have come into force on 03 November 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 was enacted by the Parliament of Australia to provide for the administration of customs and excise, and for related purposes. The Tariff Concession Instrument No. 0618149, which was introduced in 2007, is a legislative instrument that seeks to address the gap in providing tariff concessions for certain goods that are not produced domestically, thereby encouraging their importation and potentially boosting market competition. This instrument is part of the broader scheme under Part XVA of the Customs Act 1901, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders. The policy objective is to facilitate the importation of goods that are not produced in Australia, thereby potentially lowering costs for consumers and benefiting the economy by allowing access to a wider range of products.
Scope and Application
The Customs Act 1901, as amended through Tariff Concession Orders (TCOs), applies to individuals or entities seeking a concession on customs duties for specific goods. The scope of this particular legislation, as illustrated by Tariff Concession Instrument No. 0618149, is targeted at facilitating the importation of goods for which no substitutable products are produced in Australia, thereby ensuring that Australian businesses are not placed at a competitive disadvantage. The TCOs are applicable on a national level, as they fall under the Commonwealth’s jurisdiction, and the application process is overseen by the Chief Executive Officer of Customs. Any person or entity may apply for a TCO, provided the goods in question do not fall under the restricted category outlined in section 269SJ of the Act. The TCO mechanism is designed to provide tariff relief, with the specific example of Instrument TCO No. 0618149 granting a duty-free status to certain fragrance formula dosers. The geographic reach of this legislation is nationwide, with its provisions extending across all states and territories of Australia. The Act does not impose any specific exclusions beyond those outlined in section 269SJ, and its effects are limited to the goods specified in the order, ensuring that no person other than the Commonwealth is disadvantaged or subjected to new liabilities under the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0618149 under the Customs Act 1901 (section 269P) require the Chief Executive Officer of Customs (CEO) to make a written order, known as a Tariff Concession Order (TCO), if the application for tariff concession meets the core criteria specified in section 269C. Specifically, section 269C of the Act stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This means that the CEO must ensure that the goods in question are unique and not replaceable by Australian-produced goods. Once the CEO is satisfied that these conditions are met, they must issue a TCO (section 269P(3)), which declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thus providing a concession on the duty rate.
The obligations and requirements imposed by the Act on the parties it governs are primarily centred around the application and assessment process for a TCO. The applicant, in this case Australian Botanical Products Pty Ltd, must submit a valid application to the CEO for a TCO (section 269F). The CEO, in turn, has the obligation to evaluate whether the application meets the core criteria (section 269C) and, if satisfied, to make the TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). The TCO itself, once issued, does not affect the rights of any person other than the Commonwealth as at the date of registration and does not impose any liabilities on any person (subsection 269S(1)).
Regarding any offences, penalties, or consequences for breach of the Act, it is important to note that the Act does not explicitly outline specific penalties for failing to comply with the TCO provisions. However, the general framework under the Customs Act 1901 implies that non-compliance with customs regulations, including the misuse or improper application of a TCO, could lead to civil or criminal penalties. These could include fines or imprisonment, depending on the severity of the breach. The specific maximum penalties would be determined by the relevant provisions of the Customs Act 1901 and any associated regulations, but they could range from substantial fines to imprisonment terms depending on the nature and extent of the violation.