EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930938
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.
A W Faber Castell applied for a TCO in respect of certain pencils on 24 August 2009.
Instrument
TCO No 0930938 was made on 13 November 2009. It declares that those certain pencils 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. 0930938 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 Tariff Concession Instrument No. 0930938 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods that were not being produced in Australia, thus ensuring that Australian businesses could remain competitive without being unfairly burdened by customs duties on imported goods. The instrument was introduced to streamline the process of applying for tariff concessions, ensuring that the Chief Executive Officer of Customs (CEO) could efficiently determine whether to grant such concessions based on the criteria outlined in the Act. The instrument was enacted by the CEO in response to an application from A W Faber Castell regarding certain pencils, for which a tariff concession order (TCO) was issued on 13 November 2009. The objective was to provide tariff relief on these goods, recognising that no substitutable goods were being produced in Australia, thereby facilitating a fairer trading environment for importers and Australian businesses.
Scope and Application
The Tariff Concession Instrument No. 0930938, made under the Customs Act 1901, applies specifically to goods in respect of which a Tariff Concession Order (TCO) has been granted, in this case certain pencils. This instrument affects entities and individuals who import these specific pencils, granting them a lower rate of customs duty as specified under the relevant item in the Customs Tariff Act 1995. The application of the TCO is nationwide, adhering to the jurisdictional reach of the Commonwealth. It is pertinent to note that the instrument does not affect any pre-existing rights of individuals or entities except for the Commonwealth, nor does it impose any liabilities on parties other than the Commonwealth for actions taken prior to the registration of the TCO. The instrument also does not exclude any specific categories of goods from its application, unless explicitly stated in section 269SJ of the Customs Act 1901, which outlines goods that cannot be subject to a TCO. The application process and criteria for a TCO are governed by sections 269C and 269SJ of the Act, ensuring that no substitutable goods are produced in Australia at the time of the application.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0930938 pertain to the making and effect of Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F (1) allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods. Section 269C specifies that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that these criteria are met, they must make a written order (TCO) under section 269P(3), declaring that the goods subject to the application are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995. For instance, TCO No. 0930938, made on 13 November 2009, declared that certain pencils are subject to a rate of duty of free, instead of the general rate of 5%.
The obligations imposed by the Act on parties include ensuring that applications for TCOs are made in accordance with section 269F and that the CEO has the discretion to determine whether the application meets the core criteria as outlined in section 269C. The CEO must also publish a notice in the Gazette inviting submissions if there are reasons why the TCO should not be made, as per section 269K(1). The Act also requires the CEO to consider any submissions received and make a decision based on the merits of the application and the criteria set out in the Act.
The Act outlines consequences for breaches related to the making of TCOs. If an incorrect TCO is issued or if there is a failure to comply with the provisions of the Customs Act 1901, there could be potential civil or criminal consequences. For example, knowingly providing false information in an application could lead to criminal penalties, as outlined in the Crimes Act 1914. The maximum penalties for such offences can vary, but they often include fines and/or imprisonment depending on the severity of the offence. Additionally, if a person benefits from an incorrectly made TCO, they may be liable for the duties that should have been paid. The specifics of these penalties and the enforcement mechanisms are governed by the broader legal framework of the Customs Act 1901 and related legislation.