EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925428
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.
Hale Imports applied for a TCO in respect of certain placemats and coasters pvc on 17 July 2009.
Instrument
TCO No 0925428 was made on 09 October 2009. It declares that those certain placemats and coasters pvc 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. 0925428 is taken to have come into force on 17 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 was enacted to provide a framework for the regulation of imports and exports in Australia. One of its key components is Part XVA, which facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative instrument allows for reduced customs duties on specific goods, provided they meet certain criteria and are not already being produced domestically. The Tariff Concession Instrument No. 0925428, made under the Customs Act 1901, grants a tariff concession to Hale Imports for certain PVC placemats and coasters, effective from 17 July 2009. This concession was implemented because no substitutable goods were being produced in Australia at the time of the application, thereby satisfying the core criteria under section 269C of the Act. The instrument was published in the Gazette, inviting any interested parties to object, though no objections were received. The tariff rate for these goods, which is generally 5%, is reduced to free under this concession. The policy objective of this measure is to support Australian importers by reducing their customs duty liabilities, thereby making imported goods more competitive in the domestic market.
Scope and Application
The Tariff Concession Order No. 0925428, pursuant to the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO) application, namely certain placemats and coasters made of PVC. This legislation operates under the jurisdiction of the Commonwealth of Australia, with the Chief Executive Officer of Customs (CEO) having the authority to make TCOs for goods that meet certain criteria, such as the absence of substitutable goods produced in Australia at the time of the application. This order specifically provides for a zero rate of customs duty on these goods, which contrasts with the general duty rate of 5%. The TCO is applicable to the goods from the date of the application, which was 17 July 2009, and it does not affect the rights of any persons other than the Commonwealth in relation to transactions occurring prior to the registration of the TCO. Additionally, the TCO does not impose any new liabilities on any person, and it allows for the potential refund of duty to importers for goods imported since the effective date of the TCO.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include section 269F, which allows an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, and section 269C, which specifies the core criteria that must be met for an application to be considered. If the CEO is satisfied that the application meets the criteria and there are no substitutable goods produced in Australia, they must make a written order (a TCO) as per section 269P(3). This order declares that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a reduced rate of duty.
The obligations imposed on parties by this legislation include the requirement for applicants to ensure their applications are valid and meet the core criteria. The CEO has the obligation to assess applications against these criteria and make a decision on whether to grant a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1) of the Act. Once a TCO is made, it comes into effect on the date the application was lodged, as outlined in subsection 269S(1).
Breach of the requirements under the Customs Act 1901, particularly concerning the fraudulent application for a TCO, can lead to serious consequences. Under section 287 of the Act, any person who knowingly makes a false or misleading statement in an application for a TCO commits an offence and is subject to a penalty. The maximum penalty for such an offence is 10,000 penalty units, reflecting the seriousness of the breach and the potential economic impact of improper tariff concessions. This stringent penalty underscores the importance of compliance and the need for applicants to ensure their applications are accurate and truthful.