EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826518
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.
Staedtler Pacific Pty Ltd applied for a TCO in respect of certain highlighter pens on 14 August 2008.
Instrument
TCO No 0826518 was made on 7 November 2008. It declares that those certain highlighter pens 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. 0826518 is taken to have come into force on 14 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, introduced a scheme under which Tariff Concession Orders (TCOs) can be issued to provide tariff concessions on certain goods. This scheme aims to encourage the production of goods in Australia by applying lower rates of customs duty on goods that are not produced domestically. The legislation allows for the Chief Executive Officer of Customs to make TCOs following an application and a determination that no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0826518, made under this Act, provides a tariff concession on certain highlighter pens, effectively reducing their duty rate from 5% to free. This instrument was made following an application by Staedtler Pacific Pty Ltd and after no objections were raised during the consultation period. The policy objective is to support domestic production and potentially lower costs for importers who can claim refunds for duties paid on these goods since the TCO came into effect on 14 August 2008.
Scope and Application
The Tariff Concession Instrument No. 0826518, made under Part XVA of the Customs Act 1901, applies specifically to the goods for which Staedtler Pacific Pty Ltd submitted an application for a Tariff Concession Order (TCO) on 14 August 2008. This legislation facilitates the application of a lower rate of customs duty on certain goods, in this case, particular highlighter pens, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application process is overseen by the Chief Executive Officer of Customs (CEO), who must ensure the goods in question do not fall under the exclusions specified in section 269SJ of the Act. The geographic reach of this legislation is national, impacting the Commonwealth and potentially benefiting importers by enabling them to apply for duty refunds on goods imported since the TCO came into effect on 14 August 2008. Importantly, the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken before its registration. The scope of the Act can be extended or restricted through subordinate instruments, although in this instance, no such extensions or restrictions have been applied.
Key Provisions
The Customs Act 1901, specifically under Part XVA, details the process and criteria for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows a person to apply to the CEO for a TCO in respect of goods. If the CEO determines that the application pertains to goods not specified in section 269SJ, which lists goods ineligible for TCOs, the CEO must evaluate whether the application meets the core criteria outlined in section 269C. This core criterion is satisfied if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269B, respectively. If the CEO is satisfied that the application meets the core criteria, section 269P(3) mandates that the CEO must issue a written order, the TCO, specifying the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the CEO include accepting valid TCO applications and publishing a notice in the Gazette inviting any person who believes there are reasons the TCO should not be made to submit their views. The CEO must consider these submissions before making a decision. In the case of TCO No. 0826518, no submissions were received in response to the published notice. The TCO itself does not affect the rights of any person, except the Commonwealth, in a way that disadvantages them or imposes liabilities for actions taken before the TCO's registration date. Importers of the goods will benefit from the TCO as they can apply for a refund of duty on goods imported since the TCO's effective date under Regulation 126(1)(r).
Should a party or entity breach any provisions of the Customs Act 1901 or related regulations, they may face various legal consequences. Offences under the Customs Act can result in both civil and criminal penalties. For civil penalties, the Act specifies fines up to a certain amount, which can vary based on the nature and severity of the offence. Criminal penalties, on the other hand, can include imprisonment, with the maximum penalty depending on the specific offence. The Act does not provide detailed maximum penalties within the text, but these would be determined based on the particular circumstances of the breach and the applicable laws. It is crucial for entities to comply with the Act to avoid these potential penalties.