EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0947824
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 (Aust) Pty Ltd applied for a TCO in respect of certain erasers on 08 December 2009.
Instrument
TCO No 0947824 was made on 26 February 2010. It declares that those certain erasers 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. 0947824 is taken to have come into force on 08 December 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 to provide a structured framework for the administration of customs and excise duties in Australia. The introduction of the Tariff Concession Instrument No. 0947824 in 2010 addresses the need for a streamlined process in granting tariff concessions for specific goods. This instrument was introduced following an application from A. W. Faber-Castell (Aust) Pty Ltd for tariff concessions on certain erasers, highlighting the policy objective to facilitate reduced customs duty rates for goods that do not have substitutable Australian-made equivalents. The instrument was created by the Chief Executive Officer of Customs, acting under the authority granted by the Customs Act, and is intended to benefit importers by potentially reducing their duty liabilities without imposing any new obligations on them.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0947824, facilitates the application of lower rates of customs duty to specified goods through Tariff Concession Orders (TCOs). This legislation applies to any person or entity that seeks to import goods into Australia, provided those goods meet the criteria for a TCO. The Act mandates that the Chief Executive Officer of Customs (CEO) determines whether an application for a TCO meets core criteria, such as the absence of substitutable goods produced in Australia. This process is particularly relevant for industries importing goods that are not domestically produced, ensuring they can access tariff concessions if no equivalent products are manufactured within Australia. The geographic scope of this Act is national, affecting all states and territories within Australia, thereby ensuring uniformity in the application of customs duties across the country. However, the Act excludes certain goods from eligibility for tariff concessions, as specified in section 269SJ of the Customs Act 1901. The legislation also allows for the creation of further regulations and orders through subordinate instruments to refine the application of tariff concessions.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0947824 under the Customs Act 1901 (section 269F) involve the application process for a Tariff Concession Order (TCO) by a person, such as A. W. Faber-Castell (Aust) Pty Ltd, which must be considered by the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application is valid and meets the core criteria (section 269C), a written TCO is issued (section 269P(3)). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). For this specific instrument, TCO No. 0947824 was issued on 26 February 2010, applying to certain erasers under item 50 of Schedule 4 to the Customs Tariff Act 1995, with the duty rate reduced from the general 5% to free.
The obligations imposed on parties by the Customs Act 1901 include ensuring that any application for a TCO is valid and meets the criteria outlined in the Act. Specifically, section 269C stipulates that a TCO application must be for goods that are not substitutable by any goods produced in Australia in the ordinary course of business. Additionally, the CEO has an obligation to consider any submissions received in response to the Gazette notice and to make a timely decision on the application. In this instance, since no submissions were received, the CEO proceeded to issue the TCO without any objections.
The Customs Act 1901 includes provisions for potential offences and penalties, although these are not specifically detailed in the explanatory statement for TCO No. 0947824. Typically, breaches of the Act can lead to civil or criminal penalties, which can include fines and imprisonment, depending on the severity of the breach. The maximum penalties are not specified in this particular explanatory statement, but under general provisions of the Act, significant breaches can result in substantial fines and imprisonment terms.
The Tariff Concession Order itself does not affect the rights of any person other than the Commonwealth and does not impose any new liabilities on any person. It is designed to provide benefits to importers, who can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as outlined in paragraph 126(1)(r) of the Regulations. This ensures that the rights and obligations of all parties involved are clearly defined and that the process for granting tariff concessions is transparent and fair.