EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927616
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.
Jasco Pty Ltd applied for a TCO in respect of certain pencil sets on 31 July 2009.
Instrument
TCO No 0927616 was made on 09 October 2009. It declares that those certain pencil sets 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. 0927616 is taken to have come into force on 31 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 and establishes a framework for the regulation of imports and exports, including the imposition of customs duties. The Act was introduced to address the need for a structured approach to managing the flow of goods across Australia's borders. The Customs Act provides for the creation of Tariff Concession Orders (TCOs) under Part XVA, which aim to reduce the duty on imported goods that are not produced domestically. The 2010 instrument, Tariff Concession Instrument No. 0927616, was made to provide a tariff concession for certain pencil sets, effectively reducing the duty from 5% to free, provided no substitutable goods were produced in Australia. This legislative tool assists in supporting industries by reducing the cost of imported goods, thus promoting competition and consumer choice while ensuring the rights of importers are protected.
Scope and Application
The Tariff Concession Instrument No. 0927616, made under the Customs Act 1901, applies to the goods specified in the Instrument, namely certain pencil sets, and provides for a tariff concession that reduces the rate of customs duty on these goods from the general rate of 5% to free. This concession applies to the applicant, Jasco Pty Ltd, and any other entities importing similar pencil sets. The Act and its related instruments are administered at the Commonwealth level and thus have a national reach. The application of this Instrument is subject to certain exclusions as stipulated in section 269SJ of the Act, which outlines goods that cannot be subject to a Tariff Concession Order (TCO). The CEO of Customs must ensure that the application meets the core criteria, including that no substitutable goods are produced in Australia in the ordinary course of business, before a TCO can be granted. Once a TCO is issued, it comes into effect from the date the application was lodged, with no retrospective effect on the rights or liabilities of parties prior to this date. The CEO is also required to invite submissions from interested parties after accepting an application as valid, although in this case, no submissions were received.
Key Provisions
The main operative sections of this legislation relate to the creation and effect of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F (1) allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. If the application is valid and not for goods prohibited under section 269SJ, the CEO must then assess whether it meets the core criteria outlined in section 269C. The core criteria, as defined by section 269C, require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions for key terms such as "substitutable goods" and "ordinary course of business" are provided in sections 269D and 269E, respectively. If the CEO is satisfied that the application meets these criteria, they must make a written order, as stipulated in section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting a tariff concession.
The obligations imposed on the parties by this legislation are primarily on the CEO. Once a valid application is received, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the granting of a TCO, as required by subsection 269K(1). The CEO must then assess the application against the core criteria and decide whether to make a TCO. If the CEO decides to proceed, they must issue a written order, as specified in section 269P(3), which details the tariff concessions granted to the applicant. Additionally, the legislation ensures that the rights of importers will be beneficially affected and they can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.
The legislation does not explicitly outline specific offences, penalties, or consequences for breach. However, any failure by the CEO to adhere to the legislative requirements in processing a TCO application or in publishing notices and considering submissions could be subject to judicial review or other legal remedies under the Administrative Decisions (Judicial Review) Act 1977. Non-compliance by applicants or entities benefiting from a TCO could potentially lead to administrative or legal actions, particularly if they are found to have misrepresented information or otherwise breached the conditions of the concession. The consequences for such breaches would depend on the specific nature of the non-compliance and could involve the revocation of the TCO or other administrative penalties.