EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0933524
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.
Edgar Edmondson applied for a TCO in respect of certain cleaning cloths on 09 September 2009.
Instrument
TCO No 0933524 was made on 15 December 2009. It declares that those certain cleaning cloths 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 7.5%. 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. 0933524 is taken to have come into force on 09 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 Parliament of Australia, established a framework for administering customs duties and regulations, including the ability for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which can provide lower customs duty rates for certain goods. This legislative provision was introduced to address the need for flexibility in customs duties to promote trade, particularly in cases where no equivalent product is manufactured domestically. TCO No. 0933524, which was made on 15 December 2009, is a specific instance where the CEO granted a concession for certain cleaning cloths, reducing their customs duty rate from 7.5% to free, after determining that no substitutable goods were produced in Australia. The process involved publishing a notice in the Gazette to invite objections, which in this case, did not receive any. The policy objective of such concessions is to facilitate trade by making imported goods more competitively priced, thus benefiting importers and potentially the broader market.
Scope and Application
The Tariff Concession Instrument No. 0933524 applies to individuals or entities seeking tariff concessions on imported goods under Part XVA of the Customs Act 1901. Specifically, it relates to applications for Tariff Concession Orders (TCOs) submitted to the Chief Executive Officer of Customs. The Act applies to goods that do not have substitutable alternatives produced in Australia, as specified in the Act. The geographic reach of this legislation is national, as it operates under the Commonwealth's customs authority. However, it excludes goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The CEO may further refine the application of this Act through subordinate instruments, which can specify additional criteria or conditions for tariff concessions. The TCO in question, which came into effect on 09 September 2009, grants free duty on certain cleaning cloths, reducing the general rate of 7.5% applicable to these goods.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0933524 under the Customs Act 1901 (section 269F) allow for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) in respect of goods if an application is made and meets certain criteria. Section 269C of the Act specifies that a TCO application is eligible if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. Once the CEO is satisfied that the application meets these core criteria, they must make a written order (section 269P(3)) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting a tariff concession.
The Act imposes specific obligations on the parties involved. The applicant must ensure that their application is made in accordance with the provisions of the Customs Act 1901 and is valid. The CEO is required to assess whether the application meets the core criteria and, if so, to make a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made (subsection 269K(1)). The CEO's duties also include ensuring that the rights of existing parties are not adversely affected by the TCO, particularly those of importers who may apply for a refund of duty paid on the goods since the TCO was taken to have come into force (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 or the conditions set out in a TCO may result in various civil and criminal consequences. For example, if an entity fails to adhere to the obligations set forth by the Act, they may face penalties as prescribed by law. While the explanatory statement does not specify the exact penalties, breaches of the Customs Act 1901 can result in substantial fines and, in some cases, imprisonment, depending on the severity of the violation. The penalties can vary, but they are intended to ensure compliance with the regulations and to protect the interests of the Commonwealth and its citizens.