EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920819
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.
School of Environmental Research applied for a TCO in respect of certain winkler bags on 19 June 2009.
Instrument
TCO No 0920819 was made on 04 September 2009. It declares that those certain winkler bags 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 7.5%. 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. 0920819 is taken to have come into force on 04 September 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 was enacted to provide a comprehensive legal framework for the administration of customs and excise duties in Australia, and includes provisions for the creation of Tariff Concession Orders (TCOs) to provide tariff relief for specific goods. The Tariff Concession Instrument No. 0920819 was introduced to address the need for tariff concessions on certain winkler bags, which are used in environmental research. The instrument was enacted by the Parliament of Australia and aims to facilitate the importation of these specific goods by reducing the customs duty from 7.5% to free. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, thus meeting the core criteria for a TCO. The instrument came into force on 04 September 2009, the date on which the application was lodged, and does not disadvantage any person or impose liabilities on anyone in respect of anything done before the date of registration.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework for Tariff Concession Orders (TCOs), which apply to goods for which a lower rate of customs duty is specified. The Act permits the Chief Executive Officer of Customs (CEO) to issue a TCO if the application for such a concession meets the core criteria outlined in section 269C of the Act, specifically when no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act is limited to goods specified in the application, provided they are not among those listed in section 269SJ of the Act, which includes goods that cannot be subject to a TCO. The application process involves a public notice in the Gazette inviting submissions from any interested parties, although no submissions were received in the case of TCO No. 0920819. The TCO applies nationally and its effect is retroactive to the date the application was lodged, meaning that importers can apply for a refund of duty on goods imported since that date. Importantly, the TCO does not disadvantage any person by affecting their rights as at the date of registration nor does it impose any new liabilities.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to this instrument include sections 269C, 269F, 269P, and 269S. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO). Section 269C (2) outlines the core criteria for an application to be considered for a TCO, which includes that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P (3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes specific obligations on the CEO when processing a TCO application. The CEO must ensure that the application is not for goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. Additionally, the CEO must publish a notice in the Gazette, inviting any interested party to lodge a submission if they believe there are reasons why the TCO should not be made. This requirement is set out in subsection 269K(1) of the Act. The CEO must also decide whether the application meets the core criteria outlined in section 269C of the Act. In the case of TCO No. 0920819, the CEO did not receive any submissions in response to the published notice.
The Act does not specify any offences or penalties for the breach of TCO provisions. However, there are civil and criminal consequences for any improper application or misuse of a TCO. If an entity or individual submits a fraudulent application for a TCO, they could face criminal charges under the Customs Act 1906. Penalties for such offences can include fines and imprisonment, although the specific maximum penalties are not detailed in the Act. Any person who misuses a TCO by importing goods not eligible for the concession could also face civil penalties under the Act.
The TCO does not affect the rights of any 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. Importers of the goods subject to the TCO will have their rights beneficially affected, as they 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, as per paragraph 126(1)(r) of the Regulations.