EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920530
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.
Vitag Pty Ltd applied for a TCO in respect of certain spider wrap on 17 June 2009.
Instrument
TCO No 0920530 was made on 14 September 2009. It declares that those certain spider wrap 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. 0920530 is taken to have come into force on 17 June 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. 0920530 was enacted in 2009 under the Customs Act 1901 to address the need for tariff concessions on specific imported goods, in this case, certain spider wrap. This legislation was introduced to support importers by reducing the customs duty on these goods, thereby lowering their costs and potentially increasing their competitiveness. The instrument was developed in response to an application by Vitag Pty Ltd, who sought the concession as no substitutable goods were being produced in Australia at the time. The policy objective of this legislation is to facilitate the import of goods that are not locally produced, thereby supporting trade and potentially benefiting consumers through lower prices. The Customs Act 1901 provides the framework for such concessions, allowing the Chief Executive Officer of Customs to assess applications and determine whether they meet the core criteria for a tariff concession order.
Scope and Application
The Tariff Concession Instrument No. 0920530, made under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO) and is focused on reducing customs duty on these goods. This legislation is applicable to individuals or entities that have applied for and received a TCO for certain goods, effectively granting them a lower rate of customs duty as specified in the instrument. The instrument is a Commonwealth initiative, extending its jurisdictional reach across Australia. Notably, the Act excludes certain goods from being subject to a TCO, as outlined in section 269SJ of the Customs Act. The instrument allows for the CEO to make further orders and regulations to implement the terms of the TCO, thereby extending or refining its application through subordinate instruments. The rights of existing parties are protected, ensuring that no person other than the Commonwealth is disadvantaged or imposed with new liabilities due to the TCO.
Key Provisions
The Tariff Concession Instrument No. 0920530, under the Customs Act 1901, outlines specific provisions for a Tariff Concession Order (TCO) application for certain spider wrap. Section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO determines that the application pertains to goods not specified in section 269SJ, which excludes certain goods from TCO eligibility, the CEO must assess whether the application meets the core criteria as outlined in section 269C. A TCO application satisfies these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Here, the CEO was satisfied that no such substitutable goods were being produced in Australia, allowing the TCO to proceed.
The TCO, once granted, imposes specific obligations on the parties involved. The CEO must ensure that the application meets the stipulated criteria and, if satisfied, issue a written order specifying that the goods in question are subject to a lower rate of customs duty. This particular TCO, No. 0920530, specifies that the certain spider wrap are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the general duty rate of 5% reduced to free duty for these goods. This effectively benefits the rights of importers who can apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations.
Under the Customs Act, there are potential consequences for non-compliance with the provisions of a TCO. While the explanatory statement does not explicitly detail offences or penalties, breaches of customs regulations generally carry significant legal consequences. Typically, the Customs Act 1901 and associated regulations outline various offences, including fraudulent claims for tariff concessions, which can result in both civil and criminal penalties. The maximum penalties can include substantial fines and imprisonment, depending on the severity of the breach. It is essential for all parties involved to adhere strictly to the terms and conditions of the TCO to avoid these adverse outcomes.