EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0825579
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.
Artique Designs Pty Ltd applied for a TCO in respect of certain tags on 08 August 2008.
Instrument
TCO No 0825579 was made on 24 October 2008. It declares that those certain tags 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. 0825579 is taken to have come into force on 08 August 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 Commonwealth Parliament, provides a framework for the administration of customs duties and the regulation of imports and exports. One of its key provisions is the scheme for Tariff Concession Orders (TCOs) outlined in Part XVA. This scheme allows for the application of reduced customs duties on certain goods, provided they meet specific criteria. The purpose of this legislative instrument is to facilitate tariff concessions for particular goods, ensuring that they are not produced domestically and do not have substitutable goods available in Australia. This instrument was introduced to address the need for streamlined processes in granting tariff concessions, ensuring that the application process is transparent and allows for public consultation. The policy objective is to promote fair trade practices by providing duty relief on specific imported goods, which are not produced locally and have no equivalent substitutes, thereby encouraging imports without disadvantaging domestic producers.
Scope and Application
The Customs Act 1901, through Part XVA, enables the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) which apply a lower rate of customs duty to specified goods. This applies to individuals or entities seeking to import goods that are not produced in Australia and are eligible for tariff concessions. The geographic reach of this Act is national, as it is a Commonwealth statute. The application process involves submitting an application to the CEO, who must determine whether the application meets the core criteria, specifically that no substitutable goods are produced in Australia at the time the application is lodged. The application and subsequent TCO apply immediately from the date the application is submitted, without affecting any pre-existing rights or imposing liabilities. The CEO is also required to invite submissions from the public upon accepting a valid application, although no submissions were received in this case. Any exclusions or limitations on the application of the TCO are detailed within the specific terms of each order, with the CEO retaining the discretion to issue or refuse TCOs based on the criteria outlined in the Customs Act 1901.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269P, and 269S, among others, under Part XVA of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C outlines the core criteria that the CEO must assess to determine if an application meets the requirements for a TCO, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. Section 269S sets the commencement date for a TCO as the day on which the application for the TCO was lodged.
The Customs Act 1901 imposes specific obligations on the CEO and applicants for a TCO. The CEO must assess the validity of the application and determine if it meets the core criteria specified in section 269C. This includes verifying that no substitutable goods were produced in Australia on the application date. If satisfied, the CEO must make a written TCO. The applicant, on the other hand, must provide sufficient information to enable the CEO to assess the application against the core criteria. Additionally, once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K(1).
Under the Customs Act 1901, there are no specific offences or penalties outlined for breaches of the TCO provisions themselves. However, any breaches of related customs laws, such as incorrect declarations or fraudulent activities, would be subject to the penalties outlined in other sections of the Customs Act 1901 and the Customs Regulations 1993. These penalties can include fines and imprisonment for criminal offences, as well as financial penalties for civil breaches. The exact penalties depend on the nature and severity of the breach.