EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0711471
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.
Regional Pharmaceuticals Pty Ltd applied for a TCO in respect of certain cleansing wipes on 05 July 2007.
Instrument
TCO No 0711471 was made on 14 September 2007. It declares that those certain cleansing wipes 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. 0711471 is taken to have come into force on 05 July 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 Tariff Concession Instrument No. 0711471 was enacted under the Customs Act 1901 to provide tariff concessions for certain goods. This legislation was introduced to address the need for a streamlined process to grant tariff concessions on goods not produced in Australia, thereby facilitating the importation of these goods at a lower customs duty rate. The instrument was enacted by the Chief Executive Officer of Customs, who is empowered under section 269F of the Customs Act 1901 to make Tariff Concession Orders (TCOs) for goods that meet specified criteria. The primary policy objective is to ensure that the import of goods that cannot be locally produced is facilitated in a manner that encourages trade and economic efficiency without disadvantaging existing rights or imposing new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person who may apply for a TCO in respect of goods, provided the application does not pertain to goods specified in section 269SJ that cannot be subject to a TCO. If the CEO determines that a TCO application meets the core criteria, such as the absence of substitutable goods produced in Australia in the ordinary course of business, a written order is issued, declaring that the goods in question are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995. The TCO applies nationwide, encompassing all states, territories, and the Commonwealth of Australia, and provides for a lower rate of customs duty on specified goods. The TCO does not retroactively affect any rights or impose any liabilities on any person other than the Commonwealth, and as such, it does not disadvantage or impose liabilities on any person in respect of actions taken before the registration date of the TCO. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may wish to object to the TCO, although in this case, no submissions were received.
Key Provisions
The primary operative sections of the Customs Act 1901 as modified by the Tariff Concession Instrument No. 0711471 are sections 269C, 269F, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, section 269P requires the CEO to make a written order that declares the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must assess whether an application for a TCO meets the core criteria by determining if substitutable goods were produced in Australia on the day the application was lodged. If the application meets the criteria, the CEO must make a written order, effectively granting the tariff concession. Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. The Act also requires that a TCO is taken to have come into force on the day the application for the TCO was lodged, which means the concession is retroactive to that date.
The Act includes provisions for potential breaches and the consequences thereof. While the explanatory statement does not specify particular offences or penalties for failing to comply with the Act's requirements, breaches of customs regulations generally carry significant penalties. These may include fines and, in severe cases, imprisonment. The specific penalties depend on the nature and severity of the breach. For instance, under the Customs Act, an individual or entity found guilty of an offence may face fines up to a substantial amount, and in some cases, imprisonment for up to five years. The precise penalties would be determined by the severity and intent behind the breach.
In conclusion, the Tariff Concession Instrument No. 0711471 and the Customs Act 1901 provide a structured framework for granting tariff concessions on certain goods. The key sections outline the application process, criteria for approval, and the obligations of the CEO. The rights of importers are protected, and the Act ensures that the concession does not impose any new liabilities on individuals or entities. Any breach of the Act's provisions may result in significant civil or criminal penalties, reinforcing the importance of compliance with the outlined regulations.