EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925650
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 applied for a TCO in respect of certain plain postcards on 20 July 2009.
Instrument
TCO No 0925650 was made on 09 October 2009. It declares that those certain plain 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. 0925650 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, provides a framework for the regulation of customs and excise duties, including the imposition of tariffs on imported goods. To address the need for tariff concessions in certain circumstances, Part XVA of the Customs Act 1901 enables the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) for specific goods, which are then subject to a reduced rate of customs duty or even duty-free treatment. The objective of the legislation is to facilitate trade by providing relief from customs duties for goods that are not produced in Australia or for which there are no suitable Australian-made alternatives. The explanatory statement for Instrument No. 0925650, made under this Act, details the process of granting a TCO to Import Ants for certain plain postcards, reflecting the policy objective to support importers by reducing the duty on these goods from 5% to free.
Scope and Application
The Customs Act 1901 provides a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCO) to reduce the customs duty on specific goods. The Act applies to any person or entity that imports goods into Australia and seeks a tariff concession, provided the goods are not those specified in section 269SJ of the Act, which sets out those goods that cannot be subject to a TCO. The process involves an application being made to the CEO, who must determine if the goods do not have substitutable goods produced in Australia in the ordinary course of business. If the core criteria are met, the CEO must issue a TCO, declaring that the goods the subject of the TCO application are subject to a lower rate of duty. The instrument in question, TCO No. 0925650, was made for certain plain postcards and took effect on the date the application was lodged, 20 July 2009, with no submissions received against the concession. This TCO provides a benefit to importers of these specific goods by reducing the duty rate to zero, from the general rate of 5%, and does not impose any liabilities on any person.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0925650, as outlined in the Customs Act 1901, pertain to the granting of tariff concessions on specific goods. The main operative sections, particularly sections 269C, 269D, 269E, and 269P, define the criteria and processes for making Tariff Concession Orders (TCOs). According to section 269C, a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269D further defines "goods produced in Australia," section 269E defines "ordinary course of business," and section 269P mandates the CEO to make a written order if satisfied that the application meets the criteria.
The obligations imposed by the Act on the parties involved are primarily centred on the application and assessment process. The CEO must, upon receiving a valid TCO application, determine whether it meets the core criteria set forth in section 269C. If the CEO is satisfied, they must issue a written TCO, as specified in section 269P(3). Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit any objections or reasons why the TCO should not be granted, in accordance with subsection 269K(1).
In terms of penalties and consequences, the Act does not explicitly outline specific penalties for non-compliance with the TCO process. However, the absence of any substitutable goods produced in Australia, as required by section 269C, is a critical criterion for the CEO's decision. Failure to meet this criterion would mean the application does not qualify for a TCO, and thus, no concession would be granted. Any subsequent breach of the TCO conditions or misuse of the tariff concession could potentially lead to civil or criminal consequences, though these are not detailed within the provided text. It is also worth noting that the TCO does not impose any new liabilities on any person, as clarified under section 269S(1), and it does not affect the rights of any person as at the date of registration.