EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0924324
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.
United Group applied for a TCO in respect of certain granulated minerals tiles on 10 July 2009.
Instrument
TCO No 0924324 was made on 25 September 2009. It declares that those certain granulated minerals tiles 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. 0924324 is taken to have come into force on 10 July 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, provides a framework for the regulation of customs and border control. It was introduced to address the need for a comprehensive set of rules governing the importation and exportation of goods, ensuring that duties and taxes are properly collected and managed. Specifically, the Act aims to streamline the administration of customs duties and facilitate international trade while protecting domestic industries. In this context, Tariff Concession Orders (TCOs) play a critical role by offering relief from customs duties on certain goods under specified conditions. The explanatory statement for Tariff Concession Instrument No. 0924324, made under this Act, details the process and criteria for applying for and granting a TCO, ensuring that the policy objectives of promoting fair trade and economic efficiency are met. The instrument addresses the particular case of granulated minerals tiles, aligning with the broader goal of reducing duties where appropriate to support industry and consumer interests.
Scope and Application
The Customs Act 1901, as amended through Tariff Concession Instrument No. 0924324, pertains to the establishment of Tariff Concession Orders (TCOs) that provide for lower rates of customs duty on specified goods. This Act applies to any person or entity seeking a tariff concession for goods imported into Australia, provided that the goods in question are not explicitly excluded under section 269SJ of the Act, which includes items such as alcoholic beverages, tobacco products, and goods that are subject to specific regulatory controls. The TCO process is overseen by the Chief Executive Officer of Customs, who evaluates applications to ensure they meet the core criteria outlined in sections 269C and 269D, primarily focusing on the absence of substitutable goods produced in Australia. The geographic reach of this legislation is national, affecting all territories under Australian jurisdiction. The application of TCOs is also subject to consultation requirements, as stipulated in subsection 269K(1), which mandates the publication of notices in the Gazette to invite submissions from interested parties, although in this instance, no submissions were received. The commencement of the TCO is effective from the date the application is lodged, as per subsection 269S(1), and it does not retroactively affect the rights of any person other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0924324 are sections 269C, 269P(3), and 269S of the Customs Act 1901. Section 269C specifies that an application for a Tariff Concession Order (TCO) meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P(3) states that if the Chief Executive Officer of Customs (CEO) is satisfied that an application meets the core criteria, they must make a written order declaring the goods to which the TCO applies. Section 269S outlines that a TCO comes into force on the day the application was lodged. This instrument declares that certain granulated minerals tiles are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations on parties involved in the application and issuance of a TCO. An applicant must submit a valid application to the CEO, ensuring it pertains to goods not specified in section 269SJ of the Act. The CEO must review the application to confirm it meets the core criteria and, if satisfied, must make a written TCO. The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). The CEO must consider any submissions received but in this case, none were received.
Failure to comply with the provisions of the Customs Act 1901 and the associated regulations can result in civil or criminal penalties. While the specific penalties are not detailed in the explanatory statement, breaches of customs laws generally can lead to fines, imprisonment, or both, depending on the severity and intent of the breach. The maximum penalties vary but can be substantial, particularly for deliberate or repeated violations.
The Tariff Concession Instrument No. 0924324 ensures that the rights of persons, other than the Commonwealth, as at the date of registration are not adversely affected by the TCO. This means that any person who has rights in relation to the goods before the TCO is issued will not suffer any disadvantage or liability as a result of the concession. Importers, however, stand to benefit as they can apply for a refund of duty on goods imported since the TCO came into force. The instrument clearly states that it imposes no liabilities on any person.