EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925642
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.
Import Ants Pty Ltd applied for a TCO in respect of certain folding cartons and or boxes and or cases on 20 July 2009.
Instrument
TCO No 0925642 was made on 02 Ocotber 2009. It declares that those certain folding cartons and or boxes and or cases 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. 0925642 is taken to have come into force on 20 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 Tariff Concession Instrument No. 0925642, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for certain goods, thereby facilitating trade and reducing costs for importers. This instrument was introduced to allow the Chief Executive Officer of Customs to grant tariff concessions on specific goods, such as folding cartons and cases, where no substitutable goods are produced in Australia. This initiative aims to ensure that Australian importers are not at a disadvantage when importing such goods by applying a reduced or free rate of customs duty. The enactment body, the Parliament of Australia, established this framework to encourage trade by making imported goods more affordable and competitive within the domestic market.
The policy objective behind this legislation is to streamline customs processes and reduce the financial burden on importers, thereby enhancing Australia's trade competitiveness. By offering tariff concessions, the Customs Act 1901 aims to support businesses that rely on importing specific goods, ensuring they are not subjected to higher customs duties that could inflate their costs. This legislative measure ensures that the rights of importers are protected and that they can potentially apply for refunds of duty paid on goods imported since the Tariff Concession Order came into effect.
Scope and Application
The Tariff Concession Instrument No. 0925642, under the Customs Act 1901, applies to the specific goods for which Import Ants Pty Ltd applied for tariff concessions, namely certain folding cartons and boxes or cases. The Act permits the Chief Executive Officer of Customs to make a Tariff Concession Order (TCO) if certain conditions are met, specifically if no substitutable goods are being produced in Australia. This legislation allows for the reduction or exemption of customs duty on the specified goods, thereby benefiting importers of these items. The geographic reach of this legislation is national, as it pertains to goods entering Australia and is subject to the overarching provisions of the Customs Act 1901 and the Customs Tariff Act 1995.
The Act does not specify exclusions or exemptions beyond the goods listed in section 269SJ of the Customs Act, which cannot be subject to a TCO. The application of the Act can be extended or restricted through subordinate instruments, as outlined in the Customs Tariff Act 1995. The commencement of the TCO is deemed to have occurred on the date the application was lodged, 20 July 2009, without affecting the rights or liabilities of any person concerning actions taken before the registration of the TCO. This ensures that the rights of importers are advantageously affected from the commencement date, allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation revolve around Tariff Concession Orders (TCOs) under the Customs Act 1901 (section 269F). A person can apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, they must make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). In this instance, TCO No. 0925642 was made on 2 October 2009, applying to certain folding cartons and or boxes and or cases, declaring these goods to be subject to item 50 of Schedule 4 to the Tariff, with the rate of duty for these goods being free.
The obligations and requirements imposed by this Act include the process for applying for a TCO, which must be lodged with the CEO of Customs. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). If no submissions are received, the CEO must decide whether the application meets the core criteria (section 269C). The CEO must also ensure that the TCO does not affect the rights of a person as at the date of registration in a way that disadvantages that person or imposes liabilities in respect of anything done or omitted before the registration date (subsection 269S(1)).
In terms of offences, penalties, or civil/criminal consequences for breach, the Act does not explicitly state penalties for non-compliance with TCO regulations. However, the Act does provide for penalties under the general provisions of the Customs Act 1901, which can include fines and imprisonment for serious breaches of customs regulations. The maximum penalties for offences under the Customs Act 1901 can vary significantly depending on the nature and severity of the offence, with potential penalties including substantial fines and lengthy imprisonment terms. For specific offences related to TCOs, the penalties would be determined by the specific breach and the provisions of the Customs Act 1901.