EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0915091
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 black graphite pencils on 06 May 2009.
Instrument
TCO No 0915091 was made on 24 July 2009. It declares that those certain black graphite 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. 0915091 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. 0915091, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on specific imported goods, aiming to reduce the customs duty for these goods to zero. This legislative instrument was enacted by the Chief Executive Officer of Customs, in response to an application from Staedtler Pacific Pty Ltd for tariff concessions on certain black graphite pencils. The policy objective is to facilitate trade by providing tariff relief on goods for which no substitutable goods are produced in Australia, thereby promoting the economic benefits of importing these goods. The instrument was published in the Gazette, inviting submissions from interested parties, although none were received. The tariff concession came into effect on the date the application was lodged, providing immediate benefits to importers who can apply for refunds of duties paid on these goods since the effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, establishes the framework under which the Chief Executive Officer of Customs may issue Tariff Concession Orders (TCOs), which apply a lower rate of customs duty to certain goods. These orders are made in response to applications from individuals or entities, subject to the core criteria outlined in the Act. The application process requires that the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions, and that no substitutable goods are produced in Australia in the ordinary course of business. Once the CEO determines that an application meets the core criteria, they must issue a written TCO specifying the applicable tariff item. The Act mandates consultation by publishing a notice in the Gazette, inviting any interested parties to submit objections, although in this case, no submissions were received. The TCO comes into effect on the date the application is lodged, benefiting importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date, without imposing any new liabilities on any party.
Key Provisions
The main operative sections of this legislation, specifically the Customs Act 1901, are sections 269C, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. Section 269C outlines the core criteria that an application must meet for a TCO to be issued, namely, that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they are required under section 269P(3) to issue a TCO. Section 269SJ lists the goods that cannot be subject to a TCO, ensuring that certain types of goods remain subject to standard customs duties.
The Act imposes several obligations on the parties involved. The CEO must assess each TCO application against the core criteria specified in section 269C. They are also required to publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. This process ensures transparency and allows for public input. Furthermore, once a TCO is issued, the CEO must ensure that it is registered and published in the Gazette, officially making it effective. The obligations on applicants include providing detailed information about the goods and ensuring that the application meets the criteria outlined in section 269C.
Failure to comply with the requirements set out in the Customs Act 1901 can result in various consequences. The Act does not explicitly detail specific offences, penalties, or civil/criminal consequences for breach in the explanatory statement provided. However, generally, non-compliance with customs regulations can lead to fines, penalties, and in severe cases, criminal charges. For example, under the Customs Act 1901, failure to comply with customs requirements can result in penalties that include fines of up to $22,000 for individuals and $110,000 for corporations, as well as potential imprisonment. These penalties are designed to ensure adherence to the legislative framework governing customs duties and tariff concessions.
The explanatory statement provides a clear overview of the process for issuing a Tariff Concession Order and the obligations of the CEO and applicants under the Customs Act 1901. It details the criteria for issuing a TCO, the obligations of the CEO to assess applications and publish notices, and the potential consequences of non-compliance. This framework ensures that the process is transparent, fair, and enforceable, thereby maintaining the integrity of the customs duty system in Australia.