EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925645
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 calendars and or calendar blocks on 20 July 2009.
Instrument
TCO No 0925645 was made on 02 October 2009. It declares that those certain calendars and or calendar blocks 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. 0925645 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 Customs Act 1901, enacted by the Australian Parliament, introduces a framework for the issuance of Tariff Concession Orders (TCOs) through which the Chief Executive Officer of Customs may grant tariff concessions on specified goods. This legislative instrument aims to address the need for a streamlined process to reduce customs duties on certain imported goods under particular circumstances. The policy objective is to facilitate trade by reducing the cost of imported goods, thereby encouraging their entry into the Australian market where they are not produced domestically. The Explanatory Statement outlines the specifics of Tariff Concession Instrument No. 0925645, which was enacted on 02 October 2009, and details the application of this concession to certain calendars and calendar blocks, setting their duty rate to free, thereby benefiting importers who can claim refunds for duties paid prior to the TCO's effective date.
Scope and Application
The Customs Act 1901, specifically through its Tariff Concession Orders (TCO) mechanism, applies to individuals and entities seeking tariff concessions on imported goods, with the authority to make these orders resting with the Chief Executive Officer of Customs. This legislation has a national jurisdictional reach across Australia, impacting various industries that import goods and their respective supply chains. It provides a streamlined process for importers to apply for tariff concessions, aiming to benefit those who import goods that are not produced in Australia. However, the Act excludes certain goods from eligibility for a TCO, as specified under section 269SJ, thereby limiting its application scope. Furthermore, the Act allows for the extension or restriction of its application through subordinate instruments, which may further refine the eligibility criteria or operational details of the TCO scheme. This legislative framework ensures a structured approach to tariff concessions, facilitating trade while maintaining control over the types of goods that can benefit from such concessions.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0925645 under the Customs Act 1901 (the Act) concern the establishment and effect of Tariff Concession Orders (TCOs). Specifically, section 269C outlines the core criteria that an application for a TCO must meet, which is the absence of substitutable goods produced in Australia at the time the application is lodged. Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer of Customs (CEO) must issue a TCO. The TCO, in this case, Instrument No. 0925645, specifies that certain calendars and calendar blocks are subject to a reduced rate of customs duty, making them duty-free instead of the general 5% duty rate (sections 269F, 269P(3)).
The Act imposes several obligations on the parties involved in the process of applying for and receiving a TCO. Firstly, any person can apply to the CEO for a TCO under section 269F, provided the goods are not specified in section 269SJ as ineligible. The CEO has the responsibility to assess whether the application meets the core criteria as outlined in section 269C. If satisfied, the CEO must make a written order, i.e., a TCO, as stipulated in section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the TCO being made. This transparency requirement ensures that all relevant stakeholders have the opportunity to voice any concerns they might have.
The Act also establishes consequences for breaches or non-compliance with the provisions of the TCO. Although the explanatory statement does not explicitly mention offences or penalties, the general framework of the Customs Act 1901 would apply. Typically, breaches of customs regulations can lead to civil and criminal penalties, including fines and imprisonment, depending on the severity and intent behind the breach. The exact penalties would be determined by the courts, considering the specific circumstances of each case.
In summary, Tariff Concession Instrument No. 0925645 provides a mechanism for reducing customs duty on certain goods, provided they meet the criteria outlined in the Customs Act 1901. The CEO is responsible for assessing applications and issuing TCOs, while the Act requires transparency through public notices and invitations for submissions. While specific penalties for non-compliance are not detailed in the explanatory statement, the broader customs legislation provides a framework for handling such breaches, including potential civil and criminal consequences.