EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0620288
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.
Tinco applied for a TCO in respect of certain display tins on 29 December 2006.
Instrument
TCO No 0620288 was made on 23 March 2007. It declares that those certain display tins 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. 0620288 is taken to have come into force on 29 December 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 Tariff Concession Order No 0620288, made under the Customs Act 1901, was enacted in 2007 to address the specific needs of businesses seeking tariff concessions on certain goods. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders, which lower the customs duty rate for specified goods. This legislative instrument responds to applications from businesses like Tinco, which sought a concession on certain display tins. The primary policy objective of the Act, as outlined in section 269C, is to ensure that such concessions are only granted when no substitutable goods are produced in Australia in the ordinary course of business. The Tariff Concession Order No 0620288 was made to benefit importers by providing them with a pathway to refund duties on goods imported since the effective date of the order, thereby encouraging trade and reducing costs for businesses without disadvantaging existing rights or imposing new liabilities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on specified goods. This mechanism applies to entities or individuals who apply for such concessions in respect of goods, provided that the goods do not fall under the list of ineligible items outlined in section 269SJ. For an application to be considered, it must meet the core criteria stipulated in section 269C of the Act, which requires that no substitutable goods are produced in Australia at the time of application. The scope of this legislation is national, as it operates under the authority of the Commonwealth of Australia and affects all entities importing goods subject to the Customs Tariff Act 1995. The application of TCOs does not disadvantage existing parties or impose new liabilities on them, except beneficially affecting importers by allowing them to apply for duty refunds on imports made since the TCO's effective date. The TCO’s commencement date aligns with the date of the application, and any subordinate instruments that may further define or restrict the application of the TCOs are made under the authority of the Customs Act 1901.
Key Provisions
The Tariff Concession Instrument No. 0620288, under the Customs Act 1901, specifies the conditions for a Tariff Concession Order (TCO) which allows for a lower rate of customs duty on certain goods. Section 269F of the Act permits a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the application is deemed valid, and the CEO is satisfied that no substitutable goods were produced in Australia at the time of the application (section 269C), a TCO is issued. For instance, TCO No. 0620288 was made on 23 March 2007, declaring certain display tins to be subject to a duty-free rate under item 50 of Schedule 4 to the Customs Tariff Act 1995, given the absence of substitutable goods in Australia.
Obligations under the Act require the CEO to ensure that the application meets the core criteria, which include verifying that the goods in question are not specified in section 269SJ of the Act as ineligible for a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be made. In the case of TCO No. 0620288, no submissions were received, and thus the TCO was issued. The Act also mandates that the TCO does not affect the rights of any person as at the date of registration concerning actions taken before the TCO's effective date, nor does it impose any new liabilities on individuals.
The Act outlines potential penalties and consequences for breaches, although the specific provisions are not detailed in the explanatory statement. Generally, under the Customs Act 1901, non-compliance with the Act's requirements or the terms of a TCO could lead to civil or criminal penalties. Civil penalties might include fines, while criminal penalties could involve imprisonment, depending on the nature and severity of the breach. The maximum penalties for offences under the Customs Act are specified in other sections of the Act, but they are not provided in the explanatory statement for TCO No. 0620288. Nonetheless, the overarching intent is to ensure that the concessions granted do not result in undue advantage or impose unforeseen burdens on the public.