EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900758
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.
Fba Imports Pty Ltd applied for a TCO in respect of certain shoe boxes on 14 January 2009.
Instrument
TCO No 0900758 was made on 14 April 2009. It declares that those certain shoe boxes 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. 0900758 is taken to have come into force on 14 January 2009.
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 to provide a comprehensive legal framework for the regulation of customs and excise in Australia. Among its provisions, Part XVA introduces a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This scheme was introduced to address the need for concessionary tariffs for goods that do not have Australian substitutes, thereby encouraging the importation of specific goods that are not produced domestically. The Tariff Concession Instrument No. 0900758, made in 2009, exemplifies the application of this scheme. The instrument, developed under the authority of the Act, allows for free import duties on certain shoe boxes, as determined by the CEO following an application by Fba Imports Pty Ltd. The objective is to ensure that importers are not disadvantaged by the application of the concession and that they may seek refunds for duties already paid on these goods prior to the concession's effective date.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0900758, applies to persons or entities seeking tariff concessions on imported goods. Specifically, it applies to Fba Imports Pty Ltd and similar entities that import goods eligible for tariff concessions, provided these goods do not fall under the exclusions specified in section 269SJ of the Act. This instrument primarily affects the customs duty rates applicable to certain shoe boxes imported by Fba Imports Pty Ltd, granting them a duty-free status under the prescribed item of Schedule 4 to the Customs Tariff Act 1995. The scope of the legislation extends across the Commonwealth of Australia, as it pertains to the federal customs duty regime. The instrument does not impose any liabilities on persons other than the Commonwealth and does not disadvantage anyone by affecting rights as of the date of registration. The instrument's application is further extended or restricted through subordinate instruments, which may provide additional criteria or conditions for tariff concessions.
Key Provisions
The Customs Act 1901, through Tariff Concession Orders (TCOs) under section 269F, allows for the application of lower rates of customs duty on specified goods. This process begins with an application to the Chief Executive Officer of Customs (CEO) (section 269F). If the application is not for goods listed in section 269SJ, which cannot be subject to a TCO, the CEO assesses whether it meets the core criteria outlined in section 269C. This assessment requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). If the CEO is satisfied with the application, they must issue a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods (subsection 269P(3)).
The obligations imposed by the Act on parties or entities are primarily centred around the application and assessment process for TCOs. The CEO must ensure that applications are assessed against the core criteria, which includes verifying that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application (section 269C). Additionally, as soon as practicable after accepting a TCO application as valid, 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)). This ensures transparency and allows for public input before the decision is finalised.
Breaching the conditions or requirements set forth by the Customs Act 1901 can result in various consequences. While the explanatory statement does not detail specific offences or penalties, it is implied that any non-compliance with the TCO process or misrepresentation of facts in an application could lead to legal ramifications. Typically, breaches of customs regulations in Australia can result in fines and other penalties, although the exact penalties would depend on the nature and severity of the breach. For instance, knowingly making false statements in a customs declaration could lead to significant penalties under the Customs Act 1901, including substantial fines and potential imprisonment.
The Customs Act 1901 also includes provisions for civil and criminal consequences for non-compliance. Under section 126 of the Regulations, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. However, any misuse of the TCO process or failure to comply with the Act could result in the forfeiture of these benefits and additional penalties. The TCO itself ensures that it does not disadvantage any person or impose liabilities on anyone in respect of anything done or omitted before the date of registration, but any subsequent misuse of the concessions granted by the TCO could lead to enforcement actions under the Act.