EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925651
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 envelopes on 20 July 2009.
Instrument
TCO No 0925651 was made on 18 December 2009. It declares that those certain envelopes 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. 0925651 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 application and administration of customs duties and provides mechanisms for tariff concessions. The Act was introduced to facilitate efficient customs administration and to allow for tariff concessions to be applied to certain goods, thereby reducing the financial burden on businesses and consumers. Under this Act, the Chief Executive Officer of Customs is authorised to make Tariff Concession Orders (TCOs) that lower the customs duty on specified goods. Tariff Concession Instrument No. 0925651, made on 18 December 2009, is an example of this process. This specific instrument was enacted in response to an application by Import Ants Pty Ltd for a TCO on certain envelopes, resulting in a reduction of the duty rate from 5% to free. The policy objective is to support Australian businesses by making certain imported goods more affordable, thereby potentially enhancing their competitiveness and encouraging trade.
Scope and Application
The Tariff Concession Instrument No. 0925651 under the Customs Act 1901 applies specifically to certain envelopes that Import Ants Pty Ltd sought a tariff concession for. This legislation provides a framework for the Chief Executive Officer of Customs (CEO) to grant tariff concessions, thereby allowing a lower rate of customs duty on goods that meet specified criteria. The Act applies to individuals or entities seeking tariff concessions for goods not produced in Australia and not listed in section 269SJ, which excludes certain goods from eligibility. The geographic scope of this Act is national, as it pertains to the Commonwealth of Australia, and its application extends to all importers of the specified goods within Australia. There are no stated exclusions or exemptions within the Act itself, but it does stipulate that no person, other than the Commonwealth, will be disadvantaged by the tariff concession. The Act's application can be further detailed through subordinate instruments, which may provide additional criteria or conditions for specific types of goods or industries.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0925651 are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269C outlines the core criteria that must be met for a Tariff Concession Order (TCO) application to be approved, such as ensuring no substitutable goods are produced in Australia at the time of the application. Section 269F allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods, provided the goods are not specified in section 269SJ of the Act as ineligible for a TCO. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must issue a written TCO. The instrument declares that certain envelopes, subject to the application, are to be treated as goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty-free rate of 0% instead of the general rate of 5%.
The obligations imposed on parties under this Act include ensuring that TCO applications are made in accordance with the legislative criteria and that any person considering opposing the TCO has the opportunity to lodge a submission with the CEO. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties after accepting a TCO application as valid. In this case, Import Ants Pty Ltd fulfilled its obligation by applying for the TCO on 20 July 2009, and the CEO carried out their duty by issuing the TCO on 18 December 2009 after determining that no substitutable goods were produced in Australia.
Any breach of the provisions of the Customs Act 1901 concerning TCOs can result in both civil and criminal consequences. Under section 276 of the Act, a person who knowingly or recklessly makes a false or misleading statement in a TCO application can be subject to criminal penalties, including fines of up to $22,200 for individuals and $111,000 for bodies corporate, as well as imprisonment for up to two years. Furthermore, civil penalties may apply for non-compliance with the Act's provisions, with the exact penalties varying based on the severity and nature of the breach. The Act does not specify a maximum penalty for civil penalties, leaving it to the discretion of the courts to determine appropriate sanctions.