EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0809121
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.
Milford Astor Pty Ltd applied for a TCO in respect of certain cold foil on 20 May 2008.
Instrument
TCO No 0809121 was made on 08 August 2008. It declares that those certain cold foil 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. 0809121 is taken to have come into force on 20 May 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, enacted by the Australian Parliament, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme allows for a lower rate of customs duty to be applied to goods that are the subject of a TCO, providing economic benefits to certain industries by reducing the cost of importing specific goods. This Act addresses the gap in ensuring that Australian industries can compete more effectively in the global market by making certain imported goods more affordable. The policy objective behind this legislation is to foster economic growth and support Australian businesses by alleviating the financial burden of customs duties on particular imported goods, where there is no domestic production of substitutable goods.
Scope and Application
The Tariff Concession Instrument No. 0809121 under the Customs Act 1901 applies to specific goods, in this case, certain cold foil, as designated by Milford Astor Pty Ltd. The instrument is applicable to any person or entity seeking to import these goods into Australia and is intended to facilitate the import process by reducing or eliminating customs duties on these specified items. The instrument's jurisdiction extends across Australia, as it is a Commonwealth Act. The instrument excludes any goods that are specified in section 269SJ of the Customs Act 1901, which details those goods that cannot be subject to a Tariff Concession Order (TCO). The application process for a TCO is stringent, requiring the Chief Executive Officer of Customs to be satisfied that the application meets the core criteria, particularly that no substitutable goods are produced in Australia. The instrument does not affect the rights of any person, except to potentially benefit importers by allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The instrument's application can be extended or restricted through subordinate instruments, which are not specified in this particular instance.
Key Provisions
The Tariff Concession Instrument No. 0809121 under the Customs Act 1901 provides for a concession on customs duties for certain cold foil goods, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument declares that the goods are to which a prescribed item of the Tariff applies, effectively reducing the duty from 5% to free. This concession is contingent upon the Chief Executive Officer of Customs (CEO) determining that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO must also satisfy that the goods are not specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions.
Entities and individuals affected by this legislation are required to adhere to the terms set out in the Tariff Concession Order (TCO). Specifically, the CEO must ensure that any TCO application meets the core criteria, which involves a rigorous assessment of whether substitutable goods are being produced in Australia. This includes verifying the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" as outlined in sections 269D, 269E, and 269F of the Customs Act 1901, respectively. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1), although no submissions were received for this particular TCO.
Breach of the provisions in the Customs Act 1901, including the failure to comply with the requirements of a TCO, can lead to significant consequences. Subsection 269K(1) requires the CEO to invite submissions from interested parties, and any non-compliance with this requirement could result in the TCO being challenged in court. Moreover, while the explanatory statement does not explicitly detail penalties, breaches of the Customs Act can generally lead to fines and imprisonment as per section 283 of the Act, with penalties varying based on the severity and intent of the breach. Importers may also face civil penalties if they do not adhere to the terms of the TCO, including potential financial liabilities for overpaid duties.