EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0950450
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.
Sca Hygiene Australasia applied for a TCO in respect of certain tampon making machines on 30 December 2009.
Instrument
TCO No 0950450 was made on 12 March 2010. It declares that those certain tampon making machines 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. 0950450 is taken to have come into force on 30 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 amended to introduce the scheme under which Tariff Concession Orders (TCOs) could be made, addressing a gap in tariff regulation by allowing the Chief Executive Officer of Customs to provide concessional rates of customs duty for specific goods. Enacted by the Parliament of Australia, the objective of the Customs Act is to regulate and control the importation and exportation of goods, including facilitating trade and ensuring revenue collection. The explanatory statement for Tariff Concession Instrument No. 0950450 clarifies the process for applying for and granting TCOs, including the core criteria that must be satisfied for an application to be considered. The instrument, which came into effect on 30 December 2009, was introduced following an application by Sca Hygiene Australasia for tariff concessions on certain tampon making machines, which were granted as no substitutable goods were produced in Australia at the time. This concession effectively lowered the duty on these machines from 5% to free, benefiting the rights of importers who could apply for refunds of duty paid on the goods imported since the TCO came into force.
Scope and Application
The Tariff Concession Instrument No. 0950450, established under the Customs Act 1901, applies to individuals or entities seeking tariff concessions on specific goods, in this case, certain tampon making machines. The application of the Act is triggered when a person lodges an application for a Tariff Concession Order (TCO) with the Chief Executive Officer of Customs. The instrument is designed to provide a lower rate of customs duty on goods subject to a TCO, provided that no substitutable goods are produced in Australia at the time of application. The geographic reach of this legislation is national, applying across Australia as it is an instrument of Commonwealth law. The instrument does not apply to goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application of this Act can be extended or restricted through subordinate instruments as outlined in the Customs Tariff Act 1995. The instrument took effect on 30 December 2009, the date the application was lodged, and does not affect any existing rights or impose any liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs) as detailed in Tariff Concession Instrument No. 0950450, include sections 269C, 269F, 269SJ, 269P, and 269K. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. Section 269C mandates that a TCO application meets core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269SJ outlines the goods that cannot be subject to a TCO, while section 269P(3) requires the CEO to make a written order if the application meets the core criteria. Section 269K(1) mandates the CEO to publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made.
The obligations imposed by the Customs Act 1901 on the parties involved include ensuring that the application for a TCO meets the core criteria as specified in section 269C, and that the goods in question are not listed in section 269SJ, which excludes certain goods from being subject to a TCO. The CEO must also publish a notice in the Gazette as per section 269K(1), inviting submissions from any interested parties. The applicant must provide sufficient evidence to satisfy the CEO that no substitutable goods were produced in Australia in the ordinary course of business. Additionally, the CEO must make a written TCO if the application meets the criteria as per section 269P(3).
Any breaches of the provisions of the Customs Act 1901 concerning TCOs may result in civil or criminal consequences, depending on the nature and severity of the breach. While the explanatory statement does not detail specific offences or penalties, breaches of customs regulations can generally lead to penalties such as fines and imprisonment. For instance, under section 220A of the Customs Act, a person who knowingly makes a false or misleading statement in an application for a TCO could be liable for a penalty of up to $16,500 or imprisonment for up to two years, or both. Furthermore, any failure to comply with the Act’s requirements could result in the TCO being declared invalid, with potential financial repercussions for the applicant in terms of duty refunds or further duties owed.
In summary, the Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0950450, sets out clear provisions for the application and granting of Tariff Concession Orders. The Act imposes obligations on applicants to ensure their applications meet specific criteria and mandates the CEO to follow due process, including publishing notices in the Gazette and considering any submissions received. Failure to comply with these provisions can result in significant civil or criminal penalties, underscoring the importance of adherence to the Act’s requirements.