EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915088
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.
Staedtler Pacific Pty Ltd applied for a TCO in respect of certain pencils on 06 May 2009.
Instrument
TCO No 0915088 was made on 24 July 2009. It declares that those certain pencils 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. 0915088 is taken to have come into force on 06 May 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 Tariff Concession Instrument No. 0915088, enacted in 2009, amends the Customs Act 1901 by allowing the Chief Executive Officer of Customs to grant tariff concessions on specific goods, thereby reducing the customs duty payable on these goods. This legislative instrument was introduced to address the need for a streamlined process to grant tariff concessions, ensuring that goods not produced in Australia are subject to lower customs duties, thereby promoting trade and economic efficiency. The Parliament of Australia enacted this legislation to provide a mechanism for tariff concessions, aiming to facilitate smoother trade operations by lowering duty rates on imported goods where local production does not exist. This policy objective is aimed at benefiting importers by reducing their duty costs, consequently making imported goods more competitively priced in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0915088 under the Customs Act 1901 applies to specific goods for which a Tariff Concession Order (TCO) has been granted, in this case, certain pencils. The application of this legislation is limited to entities or individuals seeking to import goods that meet the criteria outlined in the Customs Act 1901. The primary purpose of this Act is to facilitate the granting of tariff concessions for imported goods, provided no substitutable goods are produced in Australia. The geographic scope of this legislation is national, as it applies to the entire Commonwealth of Australia. Any exclusions or exemptions are detailed within the Customs Act 1901, particularly under section 269SJ, which lists goods that cannot be subject to a TCO. The application of the Act can be further extended or restricted through subordinate instruments, such as regulations or further TCOs, as outlined in the Customs Act 1901.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ (section numbers referenced in parentheses). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application meets the core criteria, the CEO must make a written order declaring that the goods in question are eligible for a prescribed item of Schedule 4 to the Customs Tariff Act 1995, which specifies the tariff concession. This concession often results in a lower rate of customs duty, or even a free rate, for the specified goods. The core criteria, as outlined in section 269C, require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines the terms ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’, while section 269P mandates that if the CEO is satisfied that the application meets these criteria, a TCO must be issued.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. The applicant must ensure that their application is valid and that it complies with the criteria specified in section 269F. The CEO has the duty to assess the application and determine whether it meets the core criteria set out in section 269C. If the application is found to be valid and meets the criteria, the CEO is obligated to issue a TCO as per section 269P. Furthermore, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted (subsection 269K(1)). In this case, since no objections were received, the CEO proceeded to issue TCO No. 0915088.
Any breaches of the provisions set out in the Customs Act 1901 can result in both civil and criminal consequences. Civil penalties can include fines and other monetary penalties as specified under the relevant sections of the Act. For criminal offences, the penalties can be more severe, depending on the nature and extent of the breach. The maximum penalties for breaches under the Customs Act 1901 can vary widely, with potential fines and imprisonment terms that depend on the specific offence and the discretion of the court. The Act also allows for the imposition of penalties for failure to comply with the provisions related to the issuance and effect of TCOs, ensuring that the concessions are granted and used appropriately.