EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902073
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 white dye scouring pads on 21 January 2009.
Instrument
TCO No 0902073 was made on 17 April 2009. It declares that those certain white dye scouring pads 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. 0902073 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 Australian Parliament, introduced a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation aims to address the need for a lower rate of customs duty on certain goods, facilitating trade and reducing costs for importers. The Act empowers the CEO to make TCOs if an application is made and meets the specified core criteria, ensuring that the goods do not have substitutable alternatives produced in Australia. The policy objective is to provide tariff concessions that benefit importers by reducing or eliminating customs duty on eligible goods, thus encouraging trade and economic efficiency. The Explanatory Statement outlines the process and criteria for applying and approving TCOs, ensuring transparency and stakeholder engagement.
Scope and Application
The Tariff Concession Instrument No. 0902073, made under Part XVA of the Customs Act 1901, pertains to the application and implementation of a Tariff Concession Order (TCO) for specific white dye scouring pads. This Act applies to individuals or entities seeking tariff concessions for goods that are not produced in Australia, thereby qualifying for reduced or no customs duty. The geographic reach of this Act is national, as it operates under the overarching framework of the Commonwealth’s customs legislation. The Act excludes goods specified in section 269SJ of the Customs Act, which lists items ineligible for TCOs. The instrument extends the application of the Act by specifying the particular goods eligible for duty concessions, as outlined in Schedule 4 to the Customs Tariff Act 1995. The process involves an application to the Chief Executive Officer of Customs, who must ensure the application meets the core criteria before issuing the TCO. This instrument came into force on 21 January 2009, the date the application was lodged, and it does not retroactively affect the rights of any person other than the Commonwealth.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269E, 269F, 269P, and 269SJ (269C, 269B, 269E, 269F, 269P, 269SJ). Section 269F permits an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the application is valid and meets the core criteria as outlined in section 269C, the CEO is required to make a written order (the TCO) declaring that the goods in question are subject to a prescribed tariff concession. The core criteria for a TCO application include the absence of substitutable goods produced in Australia on the day the application was lodged, as defined by section 269B and section 269E. Section 269P(3) further stipulates that if the CEO determines that the application meets these criteria, they must issue a TCO.
The obligations imposed by the Act on the parties involved include the requirement for applicants to ensure that their applications are valid and meet the core criteria, which involves proving that no substitutable goods were produced in Australia. The CEO is obligated to review applications, determine whether they meet the criteria, and publish notices inviting objections. If no objections are received, the CEO must proceed to issue the TCO. Importers, once a TCO is in effect, have the right to apply for a refund of duty on goods imported since the date the TCO was deemed to come into force, as per Regulation 126(1)(r).
In terms of breaches and penalties, the Act does not explicitly outline specific offences or penalties for failing to comply with TCO requirements. However, any failure to adhere to the conditions set forth by the TCO or any fraudulent applications could potentially lead to investigations by the Australian Customs and Border Protection Service. Consequences could include financial penalties, legal action, or the revocation of the TCO. While the Act does not specify maximum penalties, any breaches of related customs laws can result in substantial fines and potential imprisonment under other sections of the Customs Act and associated regulations.