EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804997
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.
Jasco Pty Ltd applied for a TCO in respect of certain paper clips on 31 March 2008.
Instrument
TCO No 0804997 was made on 13 June 2008. It declares that those certain paper clips 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. 0804997 is taken to have come into force on 31 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 Tariff Concession Instrument No. 0804997 was enacted in 2008 under the Customs Act 1901 to address the need for tariff concessions for specific goods. The Customs Act 1901 establishes a framework where the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) that provide lower rates of customs duty for certain goods. This instrument specifically concerns Jasco Pty Ltd's application for a TCO on certain paper clips, which was accepted as the CEO was satisfied that no substitutable goods were being produced in Australia. The policy objective here is to facilitate the import of goods by reducing customs duty, thereby benefiting importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the TCO, which is the date the application was lodged. The Tariff Concession Instrument was introduced by the CEO in accordance with the legislative requirements and no submissions were received in opposition to the TCO.
Scope and Application
The Tariff Concession Instrument No. 0804997 under the Customs Act 1901 applies to specific goods, in this case, certain paper clips, and is designed to reduce the rate of customs duty on these goods. The instrument is applicable to entities and individuals who import these paper clips into Australia. It is important to note that the application of this Tariff Concession Order (TCO) is contingent upon the Chief Executive Officer of Customs (CEO) determining that no substitutable goods are produced in Australia, thereby satisfying the core criteria outlined in the Act. The scope of this legislation is focused on the customs duty aspect of imported goods, specifically to benefit importers by reducing their duty obligations. The instrument does not apply to goods specified in section 269SJ of the Act, which are explicitly excluded from tariff concessions. The TCO applies nationally within Australia and does not impose any liabilities on persons other than the Commonwealth. The CEO’s decision to make the TCO is subject to consultation and publication processes as stipulated in the Act, ensuring transparency and opportunity for public input.
Key Provisions
The primary sections of the Customs Act 1901 that are relevant to this legislation include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). If the CEO is satisfied that the application meets the core criteria, set out in section 269C, and is not in respect of goods specified in section 269SJ, the CEO must make a TCO. The TCO, once issued, declares that the goods subject to the application will have a lower rate of customs duty applied, as specified in the relevant schedule of the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on the parties involved include the requirement for the CEO of Customs to thoroughly assess each TCO application to ensure it meets the core criteria. Specifically, the CEO must ensure that no substitutable goods are produced in Australia on the date the application is lodged. Additionally, once a TCO application is accepted, the CEO must publish a notice in the Gazette inviting any interested parties to submit their reasons why the TCO should not proceed. This ensures transparency and allows for any potential objections to be considered.
Should the CEO fail to properly assess a TCO application or improperly issue a TCO, the consequences can be significant. Under the Customs Act 1901, breaches of the act can result in both civil and criminal penalties. For example, knowingly providing false or misleading information in a TCO application could result in criminal charges, with penalties that may include substantial fines or imprisonment. Furthermore, failure to comply with the terms of a TCO could lead to civil penalties, including financial penalties or the imposition of additional duties on the goods in question.
It is also important to note that the commencement of a TCO is deemed to be from the date the application was lodged, as outlined in subsection 269S(1). This means that any goods imported prior to the official registration of the TCO may still be subject to the standard duty rates, unless specific provisions for duty refunds are applied under the Customs Act 1901 and the Customs Tariff Act 1995. This ensures that the rights of the parties involved are protected and that no party is unfairly disadvantaged by the implementation of a TCO.