EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703649
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.
Artique Designs Pty Ltd applied for a TCO in respect of certain personalised keyrings on 06 March 2007.
Instrument
TCO No 0703649 was made on 25 May 2007. It declares that those certain personalised keyrings 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. 0703649 is taken to have come into force on 06 March 2007.
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 to establish a comprehensive framework for the regulation of customs and excise in Australia. The Act was introduced to address the need for a structured approach to the administration of customs duties and the regulation of goods entering and leaving the country. This legislation was enacted by the Parliament of Australia to provide a legal basis for the collection of customs duties and to facilitate the smooth flow of trade. The primary policy objective of the Customs Act 1901 is to ensure the effective and efficient management of customs and excise while protecting the economic interests of the nation.
The Tariff Concession Instrument No. 0703649, issued under the Customs Act 1901, provides a mechanism for granting tariff concessions on certain goods, thereby reducing the customs duty applicable to them. This particular instrument was introduced in response to an application by Artique Designs Pty Ltd for tariff concessions on personalised keyrings. The instrument was issued by the Chief Executive Officer of Customs after determining that no substitutable goods were produced in Australia, thus meeting the core criteria outlined in the Act. This concession effectively reduces the duty on the specified keyrings from the general rate of 5% to a rate of free duty, effective from the date the application was lodged, 06 March 2007. The instrument ensures that the rights of importers are positively impacted, allowing them to apply for duty refunds on imports made since the effective date.
Scope and Application
The Customs Act 1901, as amended, applies to any person or entity seeking tariff concessions for goods imported into Australia. Specifically, it encompasses applications made under section 269F by businesses or individuals aiming to secure lower customs duty rates on specific goods through a Tariff Concession Order (TCO). The Act mandates that the Chief Executive Officer of Customs (CEO) must assess the application to determine whether it meets the core criteria, such as the absence of substitutable goods produced in Australia. Once a TCO is granted, the specified goods are subject to reduced customs duty rates, as outlined in the Customs Tariff Act 1995. This Act applies across the Commonwealth, meaning its provisions are binding and enforceable throughout Australia. However, it excludes certain goods as per section 269SJ, which lists items ineligible for tariff concessions. Additionally, the Act allows for the extension or restriction of its application through subordinate instruments, although no such instruments are referenced in this particular TCO.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P(3), and 269S of the Customs Act 1901, which pertain to the criteria for Tariff Concession Orders (TCOs), the process of making such orders, and the commencement of these orders respectively. Section 269C specifies that an application for a TCO meets the core criteria if no substitutable goods are produced in Australia on the day the application is lodged. Section 269P(3) mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets the criteria, a written order (a TCO) must be made, declaring that the goods in question are subject to a prescribed rate of duty. Section 269S(1) stipulates that a TCO is deemed to come into force on the day the application for the TCO is lodged.
The Act imposes several obligations on the parties involved. The CEO must ensure that applications for TCOs meet the specified criteria, which includes verifying that no substitutable goods are produced in Australia. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid. Additionally, the CEO must consider any submissions received and make a decision on whether to grant the TCO. If the CEO decides to issue a TCO, they must do so in writing, clearly specifying the goods covered and the applicable duty rate.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. If the CEO does not adhere to the requirements for making a TCO, they may face legal challenges or penalties for improper administration. Similarly, any person who contravenes the provisions of the Act, such as by importing goods that should be subject to a higher duty rate due to a TCO not being applied correctly, may face civil or criminal penalties. The specific penalties can vary but may include fines and, in severe cases, imprisonment. For example, under the Crimes Act 1914, importing goods in violation of customs regulations can result in fines of up to $22,000 or imprisonment for up to two years, or both.
The Tariff Concession Instrument No. 0703649, which was made on 25 May 2007, is an example of how these provisions operate in practice. It declared that certain personalised keyrings are subject to a lower rate of duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. This decision was made because the CEO was satisfied that no substitutable goods were produced in Australia at the time of the application. The TCO came into effect on 6 March 2007, the date the application was lodged, and it has since benefited importers by allowing them to apply for a refund of duty on goods imported since that date. The TCO did not impose any liabilities on any person, and it did not affect the rights of anyone other than the Commonwealth as of the date of registration.