EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802702
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.
Stazo Marine Equipment Pty Ltd applied for a TCO in respect of certain agglomerated cork on 15 February 2008.
Instrument
TCO No 0802702 was made on 28 April 2008. It declares that those certain agglomerated cork 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. 0802702 is taken to have come into force on 15 February 2008.
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 Australian Parliament to regulate the importation and exportation of goods, among other purposes, and to provide for the collection of customs duties and excise. A specific feature of the Act is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or exemption of customs duties on certain goods under specified conditions. The Tariff Concession Instrument No. 0802702 was introduced to provide tariff concessions for certain agglomerated cork, following an application by Stazo Marine Equipment Pty Ltd on 15 February 2008. The primary problem addressed by this legislation is ensuring that Australian businesses have access to competitively priced materials essential for their operations, in this case, agglomerated cork, without incurring prohibitive customs duties. The Chief Executive Officer of Customs assessed the application and determined that no substitutable goods were produced in Australia, thereby satisfying the core criteria for a TCO. Consequently, the instrument declares that the specified agglomerated cork are subject to a duty rate of free, down from the general rate of 5%.
Scope and Application
The Tariff Concession Instrument No. 0802702 under the Customs Act 1901 applies to the specific goods identified in the instrument, namely certain agglomerated cork, and is directed towards those entities involved in the importation of these goods. The Act is a Commonwealth legislation that provides the framework for the imposition and concession of customs duties. The instrument applies to any person or entity importing these goods into Australia, granting them a concession by applying a zero rate of customs duty instead of the general rate of 5%. The instrument’s geographic and jurisdictional reach is national, applying across all states and territories of Australia. The Act excludes certain goods from being subject to a Tariff Concession Order, specifically those outlined in section 269SJ. The CEO must ensure that the goods in question are not substitutable by any goods produced in Australia before approving the concession, as per sections 269C and 269D. The instrument can be extended or restricted through subordinate instruments, which may further define or clarify the scope of the concession or the conditions under which it applies.
Key Provisions
The Customs Act 1901 (the Act) includes provisions for Tariff Concession Orders (TCOs), which are designed to provide relief from customs duties on certain goods under specific circumstances. Under section 269F, any person may apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO must make a written order declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a lower rate of duty or, in some cases, making them duty-free.
The Act imposes several obligations on the parties involved in the TCO process. For example, under section 269K, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe there are reasons why the TCO should not be made. This ensures transparency and provides an opportunity for stakeholders to voice their concerns. Additionally, the CEO must assess the application against the criteria in section 269C, ensuring that the decision to grant or refuse a TCO is based on a thorough evaluation of whether substitutable goods are being produced in Australia. The Act also outlines that the TCO does not affect the rights of any person as at the date of registration, safeguarding the interests of those who might be adversely affected by the concession.
Any breach of the provisions within the Act can result in significant consequences. While the explanatory statement does not specify particular offences or penalties, it is reasonable to infer that violations of the tariff concession process or misuse of the TCO could lead to legal action. Generally, under Australian law, breaches of customs regulations can result in civil or criminal penalties, including fines and, in severe cases, imprisonment. The specific penalties would depend on the nature and severity of the breach, but they could include substantial fines and potential imprisonment terms as stipulated under the relevant sections of the Customs Act 1901 and any subsidiary legislation.