EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803909
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.
The Trustee For Eco Concepts Unit Trust applied for a TCO in respect of certain tumbled pebbles on 12 March 2008.
Instrument
TCO No 0803909 was made on 30 May 2008. It declares that those certain tumbled pebbles 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. 0803909 is taken to have come into force on 12 March 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 Commonwealth Parliament and establishes a framework for the regulation of customs and excise in Australia. One of its key provisions is Part XVA, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This mechanism was introduced to address the problem of ensuring that certain imported goods do not unfairly compete with domestically produced alternatives by providing a lower rate of customs duty for specific goods. The primary policy objective is to promote fair competition and support Australian industries by ensuring that imported goods face a tariff when there are no substitutable goods produced within Australia. The explanatory statement outlines the process and criteria for making such concessions, including the requirement that no substitutable goods were produced in Australia at the time the application was lodged. The Customs Act 1901 thus aims to balance the interests of importers and domestic producers by providing a structured approach to tariff concessions.
Scope and Application
The Tariff Concession Instrument No. 0803909, made under Part XVA of the Customs Act 1901, applies to any person or entity seeking a tariff concession order for specific goods, in this case certain tumbled pebbles, from the Chief Executive Officer of Customs. This Act allows for a lower rate of customs duty on goods that are the subject of a Tariff Concession Order (TCO), provided the application meets the core criteria outlined in section 269C of the Act. Specifically, the application must pertain to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The TCO in question became effective on the date the application was lodged, 12 March 2008, and no submissions were received against the concession, indicating no opposition to the order. The instrument has a Commonwealth reach and applies nationally, with the CEO required to publish an invitation for objections in the Gazette. The TCO does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person’s rights as they stood at the date of registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0803909, under the Customs Act 1901, pertain to the establishment and implementation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P(3)). According to section 269F, an individual or entity can apply to the Chief Executive Officer (CEO) of Customs for a TCO if they believe a particular good qualifies for tariff concessions. The CEO must then determine if the application meets the core criteria as outlined in section 269C. If the application is deemed valid, the CEO issues a written order (section 269P(3)) declaring that the specified goods are subject to a lower rate of customs duty, as per a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes certain obligations on the parties involved. The CEO of Customs is tasked with assessing applications for TCOs (section 269F) and must make a decision based on whether the application meets the core criteria (section 269C). Additionally, the CEO must ensure that a TCO application is published in the Gazette, inviting any interested parties to submit any objections or reasons why the TCO should not proceed (section 269K(1)). The CEO must also ensure that any TCO issued does not retroactively affect the rights of individuals or entities other than the Commonwealth, nor impose any liabilities for actions taken prior to the TCO's effective date (section 269S(1)).
In terms of offences and penalties, the Customs Act 1901 does not explicitly state penalties for failure to comply with the provisions of a TCO or the process outlined for issuing a TCO. However, general provisions of the Customs Act 1901 and related regulations may apply to any breaches of customs law. These could include fines and imprisonment for wilful and fraudulent breaches, with the specific penalties varying based on the nature and severity of the offence. Importers who have already paid duty on goods that later become subject to a TCO can apply for a refund of the duty paid, subject to the terms and conditions outlined in the Customs (Prohibited Imports) Regulations 1956.