EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930936
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.
Aw Faber Castell applied for a TCO in respect of certain felt tipped pens or markers on 24 August 2009.
Instrument
TCO No 0930936 was made on 13 November 2009. It declares that those certain felt tipped pens or markers 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. 0930936 is taken to have come into force on 24 August 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 the framework for the administration of customs and excise in Australia. Specifically, Part XVA of the Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to certain goods, provided specific criteria are met. The enactment of this legislation aimed to address the need for flexibility in tariff rates to support economic and trade policy objectives, including the facilitation of trade and the promotion of industry competitiveness. The Tariff Concession Instrument No. 0930936, made under the authority of the Customs Act 1901, grants a tariff concession for certain felt-tipped pens or markers, setting their duty rate to free instead of the general rate of 5%. This instrument was introduced following an application by Aw Faber Castell, and after consultation, no objections were raised. The concession is effective from the date the application was lodged, 24 August 2009, and does not impose any liabilities on persons other than the Commonwealth, while potentially benefiting importers by allowing them to claim refunds on duties paid prior to the concession's effective date.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process by which Tariff Concession Orders (TCOs) are issued, enabling a lower rate of customs duty on goods specified in such orders. An application for a TCO can be submitted to the Chief Executive Officer of Customs by any person, provided the goods in question are not those explicitly excluded under section 269SJ of the Act. The CEO must determine whether the application meets the core criteria outlined in sections 269C, 269D, and 269E of the Act, which focus on the absence of substitutable goods produced in Australia in the ordinary course of business. Upon meeting these criteria, the CEO issues a written TCO. This particular legislation, Instrument TCO No. 0930936, applies to certain felt tipped pens or markers and came into force on 24 August 2009. The instrument reduces the duty on these goods from the general rate of 5% to free, as long as the CEO is satisfied that no substitutable goods are produced domestically. The TCO does not affect any pre-existing rights or liabilities of non-Commonwealth entities, though it provides potential benefits to importers by allowing them to apply for a refund of duties paid on these goods since the effective date of the TCO.
Key Provisions
The main sections of the Customs Act 1901 that are relevant to Tariff Concession Orders (TCOs) include sections 269C, 269P, and 269SJ, which define the criteria for applications, the process for making a TCO, and the types of goods that cannot be subject to a TCO, respectively. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must assess whether the application meets the core criteria specified in section 269C, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a written order is made declaring the goods subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, as per section 269P(3).
The obligations imposed by the Customs Act 1901 on the parties involved include the requirement for applicants to ensure that their TCO applications meet the core criteria as outlined in section 269C. The CEO is obligated to assess the validity of the application, consult with relevant parties as required under section 269K(1), and make a written order if the application meets the criteria. The CEO must also ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as per section 269P(3). Importers and other interested parties are entitled to lodge submissions if they believe the TCO should not be made, but in this case, no submissions were received.
The Act does not explicitly outline specific offences, penalties, or consequences for breach of the TCO provisions. However, general compliance with the Act and its regulations is expected, and failure to comply could result in legal consequences under the broader provisions of the Customs Act 1901. This might include administrative penalties, fines, or legal action for non-compliance with customs regulations. The precise penalties would depend on the nature and severity of the breach and would be determined under the relevant sections of the Customs Act 1901 and associated regulations.