EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0932711
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.
Dalton Office Products applied for a TCO in respect of certain self adhesive cellulose tape on 03 September 2009.
Instrument
TCO No 0932711 was made on 20 November 2009. It declares that those certain self adhesive cellulose tape 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. 0932711 is taken to have come into force on 03 September 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 managing customs and border control procedures, including the ability to offer tariff concessions on specific goods through Tariff Concession Orders (TCOs). This Act aims to streamline and provide flexibility in the application of customs duties by allowing the Chief Executive Officer of Customs to reduce or eliminate duty on certain imported goods under particular circumstances, thereby addressing economic and trade policy objectives. TCO No. 0932711, made under this Act, was introduced to provide tariff relief on certain self-adhesive cellulose tape, recognising the absence of substitutable goods produced in Australia. This instrument was designed to benefit importers by potentially reducing their duty liabilities and encouraging trade in these specific goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework through which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO). This legislation applies to any person or entity that may seek a concession in customs duty for certain goods, ensuring these goods are not produced in Australia in the ordinary course of business and that no substitutable goods exist domestically. The geographic reach of this Act is national, as it pertains to the Customs Act 1901, which is a Commonwealth statute. The TCOs themselves are designed to offer tariff relief on specific goods, thereby affecting the import duties imposed on these items. The application process is stringent, as the CEO must ensure the goods in question meet the core criteria stipulated by the Act, particularly by confirming that no substitutable goods are being produced in Australia. The scope of the legislation extends to providing procedural fairness by requiring the CEO to publish notices in the Gazette inviting submissions from interested parties, although in the case of TCO No. 0932711, no submissions were received. This instrument is effective from the date the application was lodged, ensuring that the rights of importers are advantageously affected from that point forward, and no liabilities are imposed on any person for actions taken prior to the registration of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0932711 under the Customs Act 1901 primarily concerns the establishment of a Tariff Concession Order (TCO) for certain self-adhesive cellulose tape, effective from 3 September 2009 (sections 269F, 269P(3)). A TCO allows for a lower rate of customs duty on specified goods, in this case reducing the general rate of duty from 5% to free, provided the application meets the core criteria set out in section 269C. Specifically, the application must demonstrate that, on the date it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. "Substitutable goods" are defined in section 269D, "ordinary course of business" in section 269E, and the process for determining these aspects is further clarified in section 269B.
The Act imposes several obligations on the parties involved. For the applicant, Dalton Office Products, it is necessary to ensure that the application is made in accordance with the provisions of the Customs Act 1901, specifically that the goods in question do not have substitutable alternatives produced domestically. The Chief Executive Officer of Customs (CEO) is required to assess the application against the core criteria, publish a notice in the Gazette inviting submissions if the application is accepted as valid, and make a written order if the application meets the criteria (sections 269F, 269K(1)). In this instance, the CEO did not receive any submissions opposing the TCO.
In terms of consequences, the Act does not explicitly outline specific offences or penalties for non-compliance with the TCO provisions, but general breaches of the Customs Act 1901 may lead to criminal or civil penalties. The maximum penalties for breaches of the Customs Act can vary widely depending on the nature and seriousness of the offence, but they can include fines and imprisonment. For instance, under section 246 of the Customs Act 1901, contravening provisions of the Act can result in penalties up to $22,000 or three times the value of the goods involved, whichever is greater, for individuals, and up to $110,000 for bodies corporate. The Act ensures that the TCO does not affect existing rights or impose new liabilities on any person other than the Commonwealth, thereby protecting the interests of those who have already imported the goods prior to the TCO's effective date.