EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814825
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.
A W Faber Castell Pty Ltd applied for a TCO in respect of certain pens or markers on 27 June 2008.
Instrument
TCO No 0814825 was made on 12 September 2008. It declares that those certain pens or markers 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. 0814825 is taken to have come into force on 27 June 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 Australian Parliament and serves as the foundational legislation governing customs and excise matters within Australia. The Act was introduced to provide a comprehensive framework for the administration of customs duties, excise duties, and other charges. One of the mechanisms provided under this Act is the ability to create Tariff Concession Orders (TCOs), which offer reduced rates of customs duty on certain goods. The explanatory statement for Tariff Concession Instrument No. 0814825, made under the Customs Act 1901, details the process and criteria for such concessions. A TCO application was submitted by A W Faber Castell Pty Ltd on 27 June 2008, for certain pens or markers, and was approved on 12 September 2008. This instrument declared that these goods were subject to a zero percent duty rate, down from the standard 5 percent, as no substitutable goods were being produced in Australia at the time of application. The instrument became effective on the date of application, 27 June 2008, and no submissions were received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0814825, enacted under the Customs Act 1901, applies to the specific goods mentioned in the instrument, namely certain pens or markers, and pertains to the process of applying for tariff concessions. This instrument is applicable to the Chief Executive Officer of Customs (CEO) who must assess whether an application for a Tariff Concession Order (TCO) meets the core criteria as outlined in the Act. The instrument comes into effect from the date the application was lodged, which is 27 June 2008, and the concession applies to the goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The geographic reach of this Act is national, as it is an instrument of the Commonwealth, and its application is limited to the specified goods and the particular transaction of importing these goods. The CEO is required to publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received in this case. Importantly, the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on anyone, while potentially benefiting importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0814825 under the Customs Act 1901 are sections 269C, 269F, and 269P(3) (section 269C), which detail the criteria for the application and approval of a Tariff Concession Order (TCO). Section 269F (section 269F) allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. The CEO must decide whether the application meets the core criteria set out in section 269C (section 269C), which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order (section 269P(3)). The instrument, TCO No. 0814825, declares that certain pens or markers are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free rather than the general rate of 5%.
The Customs Act 1901 imposes several obligations on the parties involved in the process of obtaining a TCO. The applicant must ensure that their application is made in respect of goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO (section 269F). The CEO has the responsibility to verify that the application meets the core criteria, particularly that no substitutable goods were produced in Australia on the application date, and to make a written TCO if the criteria are satisfied (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made (subsection 269K(1)). The TCO does not affect the rights of persons other than the Commonwealth as at the date of registration, and it does not impose any liabilities on any person (subsection 269S(1)).
The Act provides for civil and criminal consequences for breaches of its provisions. The specific penalties for breaches related to the making of a TCO are not explicitly stated in the explanatory statement; however, general provisions within the Customs Act 1901 and related legislation likely apply. These could include fines and imprisonment for fraudulent claims or misrepresentations made in an application for a TCO. The precise penalties would depend on the nature and severity of the breach, as well as other relevant legislation such as the Crimes Act 1914. The Act also allows for the imposition of financial penalties for non-compliance with tariff regulations, which could include fines for incorrect declarations or evasion of duty.