EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902067
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.
ED Oates Pty Ltd applied for a TCO in respect of certain sponge sheets on 21 January 2009.
Instrument
TCO No 0902067 was made on 17 April 2009. It declares that those certain sponge sheets 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. 0902067 is taken to have come into force on 21 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, enacted by the Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation addresses the problem of ensuring that certain goods are not subject to customs duty if they are not being produced domestically in an ordinary course of business, thereby encouraging the importation of these goods. The Tariff Concession Instrument No. 0902067, introduced on 17 April 2009, exemplifies this by granting a tariff concession on certain sponge sheets, reducing the duty rate from 5% to free, effective from 21 January 2009, the date the application was lodged. This instrument ensures that the rights of importers are positively affected, allowing them to apply for a refund of duty on goods imported since the effective date, while not imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) which provide for a reduced rate of customs duty on specified goods. This Act applies to any person or entity that wishes to import goods and avail themselves of reduced duty rates by applying for a TCO from the Chief Executive Officer of Customs (CEO). The application process is governed by strict criteria, including the requirement that no substitutable goods be produced in Australia at the time of application. The scope of the Act extends nationally across Australia, impacting all importers and goods subject to customs duties. While the Act generally applies to a wide range of goods, it explicitly excludes certain goods as specified in section 269SJ, which cannot be subject to a TCO. The Act also allows for the extension and restriction of its application through subordinate instruments, which may provide further detail or clarification on specific matters. Importantly, the Act ensures that the implementation of a TCO does not retroactively affect the rights of any person, thus protecting importers from any adverse consequences of changes in duty rates for transactions that occurred prior to the TCO's effective date.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) through Part XVA, which facilitates reduced customs duty rates for specified goods. Under section 269F, an application can be made to the Chief Executive Officer of Customs (the CEO) for a TCO concerning certain goods. Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Furthermore, section 269P(3) mandates that if the CEO is satisfied that the application meets these criteria, a written order must be issued to apply a prescribed rate from Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette once a TCO application is accepted as valid, inviting submissions from any interested parties who may oppose the TCO. For TCO No. 0902067, no submissions were received, indicating that the CEO was likely unopposed in granting this order. Additionally, the Act ensures that the TCO does not retroactively affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on such persons for actions taken prior to the TCO's registration date.
Should any party fail to comply with the provisions of the Act or the terms of a TCO, there are potential consequences. While the explanatory statement does not specify detailed offences or penalties, breaches of customs regulations generally can lead to substantial fines and legal action. The maximum penalties for customs offences can be significant, depending on the severity and intent of the breach. For instance, under the Customs Act, severe breaches can result in fines up to $22,200 for individuals and $111,000 for corporations, with additional criminal penalties possible in cases of intentional or reckless conduct.
Overall, the Act ensures that the process for granting TCOs is transparent and fair, with clear provisions for application, assessment, and publication. The obligations placed on the CEO and applicants are designed to maintain the integrity of the tariff concession scheme, ensuring that the benefits are appropriately and legally conferred.