EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0809127
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.
Enviroballs Australia applied for a TCO in respect of certain stain stick on 21 May 2008.
Instrument
TCO No 0809127 was made on 08 August 2008. It declares that those certain stain stick 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. 0809127 is taken to have come into force on 21 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 Tariff Concession Instrument No. 0809127, enacted in 2008, addresses the need to provide tariff concessions on specific goods as outlined in the Customs Act 1901. The instrument allows the Chief Executive Officer of Customs to grant tariff concessions on certain stain sticks, reducing the customs duty rate from the general rate of 5% to free, provided that no substitutable goods are produced in Australia. This concession was introduced to facilitate the importation of these specific goods under the Customs Tariff Act 1995, ensuring they are subject to a lower rate of duty, thereby benefiting importers who may apply for refunds of duty paid on these goods since the effective date of the concession. The instrument was developed in accordance with the legislative framework established by the Australian Parliament, aiming to streamline customs processes and reduce costs for importers of the specified goods.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0809127, applies to any individual or entity seeking tariff concessions for specific goods imported into Australia, thereby altering the rate of customs duty applicable to those goods. The Act provides a framework whereby the Chief Executive Officer of Customs can grant tariff concessions through Tariff Concession Orders (TCOs) for goods not produced in Australia, thereby reducing the customs duty on these goods. The instrument specifically applies to certain stain sticks as applied for by Enviroballs Australia, which were granted a concession resulting in a duty-free status for these goods, as opposed to the general rate of 5%. The geographic scope of the Act is national, impacting all customs and imports across Australia. The Act does not specify exclusions or exemptions, though it does exclude certain goods from being subject to TCOs as per section 269SJ. The Act's application may be further defined through subordinate instruments, but the primary focus is on ensuring that no substitutable goods are produced in Australia at the time of application, as per sections 269C and 269D. The commencement of this particular TCO is deemed to have occurred on the date the application was lodged, 21 May 2008.
Key Provisions
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) through Part XVA, which allows the Chief Executive Officer (CEO) of Customs to grant concessions on customs duty for specified goods. According to section 269F, a person may apply to the CEO for a TCO, provided the goods are not listed in section 269SJ, which excludes certain goods from this scheme. If the CEO determines that the application meets the core criteria, they must issue a written order (TCO) under section 269P(3). This order specifies the goods and the corresponding item in Schedule 4 to the Customs Tariff Act 1995, resulting in a lower rate of duty. For instance, TCO No. 0809127, issued on 8 August 2008, applies to certain stain sticks, granting them a free duty rate instead of the general rate of 5%.
The Act imposes specific obligations on the CEO regarding TCO applications. Under section 269C, the CEO must ensure that the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed. In the case of TCO No. 0809127, no submissions were received. The TCO's effective date is the day the application was lodged, as stated in section 269S(1), meaning TCO No. 0809127 is considered effective from 21 May 2008.
The Act also outlines the consequences of issuing a TCO. It ensures that the rights of any person (other than the Commonwealth) are not adversely affected by the TCO, particularly regarding actions taken before the TCO's registration date. Importers of goods subject to a TCO benefit from this protection, as they can apply for a refund of duties paid on imports since the TCO's effective date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person, thereby safeguarding them from any retrospective liabilities.
Failure to comply with the provisions of the Customs Act 1901 or the specific terms of a TCO may result in legal consequences. While the Act does not explicitly detail penalties for non-compliance with TCOs, general provisions of the Customs Act may apply. These could include fines or imprisonment for breaches related to customs duties or misrepresentations. However, the specific penalties would depend on the nature and severity of the breach, and any additional regulations or legislative instruments that may be in place.