EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925647
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 postcards on 20 July 2009.
Instrument
TCO No 0925647 was made on 02 October 2009. It declares that those certain postcards 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. 0925647 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 was enacted by the Australian Parliament to facilitate and regulate the movement of goods into and out of Australia, including the imposition of customs duty on imported goods. The Act provides a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs to lower the customs duty on specific goods. This was introduced to address the need for a mechanism to provide tariff relief on certain imported goods under specific conditions. In this context, Tariff Concession Instrument No. 0925647 was developed to provide tariff relief on certain postcards. The policy objective is to ensure that no substitutable goods are produced in Australia, thereby allowing for duty-free importation of these specific goods, as determined by the CEO of Customs.
Scope and Application
The Tariff Concession Instrument No. 0925647 applies to specific goods, namely certain postcards, and to the entity that applied for the concession, Import Ants Pty Ltd. The legislation forms part of the broader Customs Act 1901, under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). The TCO applies nationally and is aimed at ensuring that customs duty concessions are granted when appropriate, benefiting importers of the specified goods by reducing their duty obligations. The application of the TCO is restricted to goods that do not have substitutable Australian-produced alternatives, as outlined in section 269C of the Act. The CEO's decision to issue the TCO was based on the absence of substitutable goods produced in Australia. The TCO does not affect any pre-existing rights or liabilities of entities other than the Commonwealth and provides a mechanism for importers to seek duty refunds for goods imported since the TCO came into effect on 20 July 2009.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269E, 269D, 269SJ, 269F, and 269P. These sections provide the framework for applying for and obtaining a TCO, which allows for a lower rate of customs duty on specific goods. Section 269F permits an application to the Chief Executive Officer of Customs (CEO) for a TCO. If the application does not pertain to goods specified in section 269SJ and meets the core criteria in section 269C, the CEO must issue a written order declaring that the goods are subject to a specified rate in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269C mandates that for a TCO application to be approved, it must be established that no substitutable goods were produced in Australia on the date the application was lodged. This involves a determination under section 269D as to what constitutes "goods produced in Australia" and "ordinary course of business," as well as an assessment under section 269E of whether the goods in question are substitutable. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections to the proposed TCO. This ensures transparency and allows for stakeholder input before a TCO is made.
Failure to comply with the provisions of the Act can result in both civil and criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of customs regulations typically attract significant penalties. Under Australian law, contravening customs legislation can lead to criminal charges, including fines and imprisonment, as well as civil penalties such as financial penalties and the confiscation of goods. The exact penalties depend on the nature and severity of the breach, but they can be substantial, reflecting the importance of adhering to customs regulations.
The Tariff Concession Order No. 0925647, which pertains to certain postcards, exemplifies the application of these provisions. By ensuring that no substitutable goods were produced in Australia, the CEO was satisfied that the application met the core criteria. Consequently, the CEO issued a TCO, reducing the duty on these specific postcards from the general rate of 5% to zero. This order came into effect on 20 July 2009, the date the application was lodged, and it does not impose any liabilities on any person or disadvantage anyone who had rights as of the registration date.