EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0827894
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.
Jb Macmahon Pty Ltd applied for a TCO in respect of certain glass wine bottles labellers on 25 August 2008.
Instrument
TCO No 0827894 was made on 07 November 2008. It declares that those certain glass wine bottles labellers 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. 0827894 is taken to have come into force on 25 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 was amended to introduce a scheme allowing for Tariff Concession Orders (TCOs) through Part XVA. This legislative change was enacted to address the need for concessionary rates of customs duty on certain imported goods, specifically when there are no substitutable goods produced in Australia in the ordinary course of business. This scheme allows for the application of a lower rate of customs duty on specified goods, facilitating easier access to these goods for businesses and consumers. The policy objective, as outlined in the Act, is to ensure that when a TCO application meets the core criteria, the CEO must issue a written order, thereby reducing the duty on the specified goods. The Tariff Concession Instrument No. 0827894, made under this Act, exemplifies the application of this scheme by the Chief Executive Officer of Customs, in response to an application from Jb Macmahon Pty Ltd for tariff concessions on certain glass wine bottles labellers.
Scope and Application
The Tariff Concession Instrument No. 0827894, issued under the Customs Act 1901, applies to entities or individuals who seek tariff concessions for specific goods, ensuring that these goods are subject to reduced or free customs duties when imported into Australia. The Act enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) based on applications from interested parties, provided the goods in question do not fall under the restricted categories specified in section 269SJ of the Act and meet the core criteria outlined in sections 269C, 269B, 269D, and 269E. These criteria include the absence of substitutable goods produced in Australia at the time of the application and the goods being produced in Australia in the ordinary course of business. The instrument's scope extends nationally, affecting all importers and the Commonwealth, and it is effective from the date of the application, which in this case was 25 August 2008. The TCO does not impose any new liabilities or disadvantage existing rights, and it allows for duty refunds for importers of the specified goods under Regulation 126(1)(r).
Key Provisions
The Tariff Concession Instrument No. 0827894, issued under the Customs Act 1901, specifically addresses the application of lower rates of customs duty on certain goods, in this case, glass wine bottles labellers (sections 269C, 269P). The instrument was made on 7 November 2008 and came into effect on 25 August 2008, the date the application was lodged (subsection 269S(1)). It applies the free rate of duty to these labellers, which contrasts with the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995). The decision to issue this Tariff Concession Order (TCO) was based on the CEO's satisfaction that no substitutable goods were produced in Australia on the day the application was made, fulfilling the core criteria outlined in section 269C.
The obligations imposed by this legislation on parties involve ensuring that applications for TCOs are made in accordance with the specified criteria and that the CEO is notified of any potential submissions opposing the TCO (subsection 269K(1)). The CEO is mandated to make a decision on the application based on the criteria set forth in section 269C, which includes the consideration of whether substitutable goods are produced in Australia. The CEO is also required to publish a notice in the Gazette inviting any objections to the TCO and consider any submissions received before making a final decision.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations could lead to legal consequences. For instance, incorrect classification of goods or misrepresentation in an application may result in financial penalties or legal action. The specific penalties for breaches of the Customs Act are not detailed in the explanatory statement but typically include fines and, in some cases, imprisonment, depending on the severity of the breach. The Customs Act also allows for the imposition of civil penalties for non-compliance, which can include substantial financial penalties based on the nature and extent of the breach. It is essential for applicants and other parties to adhere to the legal framework to avoid these potential consequences.