EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0845341
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.
The Hour Glass Australia applied for a TCO in respect of certain ball point and or roller pens on 30 December 2008.
Instrument
TCO No 0845341 was made on 14 April 2009. It declares that those certain ball point and or roller 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. 0845341 is taken to have come into force on 30 December 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 Tariff Concession Instrument No. 0845341, enacted in 2009, is an instrument under the Customs Act 1901, which facilitates tariff concessions for specific goods by reducing or eliminating customs duties. This instrument was introduced to address the need for tariff relief on certain imported goods, allowing businesses to import these goods at a lower duty rate or free of charge, thereby promoting trade efficiency and potentially lowering costs for consumers. The instrument was developed following an application by Hour Glass Australia for tariff concessions on specific ballpoint and roller pens, which the Chief Executive Officer of Customs deemed eligible as no substitutable goods were produced in Australia at the time of application. The policy objective is to provide a streamlined process for applying and granting tariff concessions where appropriate, enhancing the competitive position of Australian businesses in the global market.
The enactment and implementation of this instrument by the relevant federal authority, specifically the CEO of Customs, aim to ensure that tariff concessions are granted in accordance with the statutory criteria outlined in the Customs Act 1901. The process involves publishing a notice in the Gazette to allow for public submissions, although in this instance, no submissions were received. The tariff concession takes effect from the date the application was lodged, thereby providing immediate benefits to importers who can now claim duty refunds on goods imported since that date without incurring any new liabilities.
Scope and Application
The Customs Act 1901 applies to the regulation of imports and exports through the imposition of customs duties, and includes provisions for Tariff Concession Orders (TCOs) to provide relief from these duties under specific circumstances. TCOs may be applied for by any person in relation to particular goods, subject to the conditions outlined in the Act. The application process involves an assessment by the Chief Executive Officer of Customs, who must be satisfied that the goods in question are not substitutable by products already being produced in Australia. Once approved, the TCO provides for a lower or free rate of customs duty on the specified goods, effective from the date the application was lodged. The application process also requires public notification to allow for any objections, although in the case of TCO No. 0845341, no objections were received. The application of the Act is national in scope, and extends to all states and territories within Australia. There are specific exclusions, such as for goods listed in section 269SJ of the Act, which are not eligible for tariff concessions. The operation and scope of the TCO scheme can be further defined by subordinate instruments, although the primary legislation sets out the fundamental criteria and processes involved.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0845341 (TCO) include sections 269C and 269P(3) of the Customs Act 1901. Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires the Chief Executive Officer (CEO) of Customs to issue a written order, a TCO, if satisfied that the application meets these criteria. The TCO specifies that certain ball point and roller pens are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting them a free rate of duty instead of the general 5% rate.
Under the Customs Act 1901, the CEO is obligated to assess any application for a TCO, ensuring it does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. If the CEO determines that the application meets the core criteria, they must issue a TCO. The CEO must also publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made. In this instance, no submissions were received in response to the published notice.
The TCO imposes certain obligations on the parties it governs, primarily ensuring that the CEO assesses applications correctly and issues TCOs where appropriate. Importers benefit from this process by potentially being able to apply for a refund of duty on goods imported since the TCO's effective date. The TCO itself does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the registration date.
Breach of the provisions of the Customs Act 1901 related to the issuance or application of TCOs can result in civil or criminal penalties. Offences may include misrepresenting facts in an application or failing to comply with the notice requirements. The maximum penalties for these breaches can vary, but they may include substantial fines and, in severe cases, imprisonment. The exact penalties would depend on the nature and severity of the breach, as outlined in the relevant sections of the Customs Act 1901 and any associated regulations.