EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0810493
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.
Super Cheap Auto applied for a TCO in respect of certain plastic storage boxes on 29 May 2008.
Instrument
TCO No 0810493 was made on 22 August 2008. It declares that those certain plastic storage boxes 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. 0810493 is taken to have come into force on 29 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 Parliament of Australia, establishes a framework for the administration of customs duties and the regulation of imports and exports. To address specific economic needs and promote trade, the Act allows for the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. These orders provide reduced customs duty rates for certain goods, contingent on certain criteria being met. The primary problem this legislative instrument aimed to address is the facilitation of trade by reducing the financial burden of customs duties on specific goods, thereby encouraging imports and supporting economic activities. The policy objective, as stated in the explanatory statement, is to ensure that the application of TCOs does not disadvantage existing rights and does not impose new liabilities on parties other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on certain goods. The Act applies to any person who may apply to the Chief Executive Officer of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. The Act requires that for a TCO application to meet the core criteria, no substitutable goods must be produced in Australia in the ordinary course of business on the day the application is lodged. If the CEO determines that the application meets these criteria, they must issue a written order, which declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, effectively granting tariff concessions. This process ensures that the application of tariff concessions is subject to rigorous assessment, maintaining the integrity of the scheme while providing benefits to eligible importers. The geographic and jurisdictional reach of this Act is national, as it pertains to the Commonwealth of Australia and its customs duties. The Act extends its application through subordinate instruments, such as the Customs Tariff Act 1995, which further defines terms and sets out the tariff schedule applicable to the goods in question.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0810493 are sections 269C, 269B, 269D, 269E, and 269P of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269B provides definitions for terms such as "goods produced in Australia", "ordinary course of business", and "substitutable goods". Section 269D defines "goods produced in Australia", section 269E defines "ordinary course of business", and section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the TCO application meets the core criteria, they must make a written order 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 applies.
The Customs Act 1901 imposes several obligations on parties involved in the TCO process. Section 269F allows a person to apply to the CEO for a TCO in respect of goods, but the application must not be in respect of goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, they must make a written order as specified in section 269P(3). Furthermore, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting submissions from any person who believes there are reasons why the TCO should not be made. In this case, no submissions were received. Section 269S(1) specifies that a TCO is deemed to have come into force on the day the application for the TCO was lodged.
Under the Customs Act 1901, there are no direct offences or penalties specified for breaches of the Act in the context of TCOs. However, failure to comply with the requirements or making false or misleading statements in a TCO application may result in legal consequences under other provisions of the Act or related legislation. For example, knowingly making a false statement in an application or declaration can lead to criminal penalties under section 240 of the Crimes Act 1914, which can include fines and imprisonment. Additionally, any breach of the terms of a TCO could potentially result in the cancellation of the TCO and the re-imposition of the original duty rates on the goods.