EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1003417
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.
The Decor Corporation Pty Ltd applied for a TCO in respect of certain cooler bags on 19 January 2010.
Instrument
TCO No 1003417 was made on 09 April 2010. It declares that those certain cooler bags 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. 1003417 is taken to have come into force on 19 January 2010.
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 by the Australian Parliament to regulate the importation and exportation of goods, including the imposition of customs duties. It provides the framework under which the Chief Executive Officer of Customs can grant Tariff Concession Orders (TCOs) to reduce or eliminate customs duty on certain goods, provided certain criteria are met. This legislative instrument was introduced to address the need for a streamlined process to grant tariff concessions, thereby facilitating trade and potentially lowering costs for businesses and consumers. Tariff Concession Instrument No. 1003417 was made on 09 April 2010 under the authority of the Customs Act 1901, in response to an application by The Decor Corporation Pty Ltd for a tariff concession on certain cooler bags. The policy objective in this instance was to ensure that the tariff concession would not disadvantage any party other than the Commonwealth and would not impose any new liabilities on persons other than the Commonwealth. The instrument came into effect on 19 January 2010, the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 1003417, made under the Customs Act 1901, applies to specific cooler bags that are subject to a Tariff Concession Order (TCO). The Act provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods if no substitutable goods are produced in Australia. The scope of the Act extends to any person or entity that wishes to import goods that qualify for a TCO, provided the goods do not fall under the categories specified in section 269SJ of the Act, which are ineligible for tariff concessions. The TCO applies on a national level across Australia and operates in accordance with the provisions of the Customs Tariff Act 1995. There are no exclusions or exemptions specified in this particular TCO, and it is effective from the date the application was lodged. The TCO does not affect any existing rights or liabilities of persons other than the Commonwealth and does not impose any new liabilities.
Key Provisions
The primary sections of the Customs Act 1901, as applied by Tariff Concession Instrument No. 1003417, establish a framework for Tariff Concession Orders (TCOs) under section 269F (1). This section allows individuals to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of specific goods. If the CEO is convinced that the application does not pertain to goods listed in section 269SJ, they must assess whether the application meets the core criteria outlined in section 269C. For a TCO application to be considered valid, it must satisfy the condition that no substitutable goods are produced in Australia on the day the application is submitted (section 269C). The definitions of 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' are provided in sections 269D, 269E, and 269F respectively. If the CEO confirms that the application meets these criteria, they are mandated to issue a written order, or TCO, specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995, as per subsection 269P(3).
Under this Act, the CEO bears the responsibility of ensuring that the application aligns with the stipulated core criteria. This includes verifying that no substitutable goods are produced in Australia at the time of the application. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to submit their views on why the TCO should not be granted (subsection 269K(1)). The CEO must also consider any submissions received in response to this notice. The TCO's effective date is determined to be the day the application was lodged, as stated in subsection 269S(1).
The obligations imposed by the Customs Act on the parties include the necessity for applicants to ensure their applications meet the core criteria set out in section 269C. They must provide evidence that no substitutable goods are produced in Australia at the time of application. The CEO, on the other hand, is obligated to evaluate the application against these criteria and, if satisfied, to issue a TCO. Furthermore, the CEO must publish a notice in the Gazette and consider any submissions received. The Act also imposes obligations on importers, allowing them to apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force (paragraph 126(1)(r) of the Regulations).
In terms of penalties and consequences for breaches, the Customs Act does not specify particular offences or penalties for failing to comply with the TCO provisions in this explanatory statement. However, general penalties under the Act for breaches such as incorrect declarations, fraudulent activities, or non-compliance with customs regulations can include substantial fines and, in severe cases, imprisonment. For example, under section 255D, a person who knowingly makes a false statement in a customs declaration may be liable to a penalty of up to 10,000 penalty units or imprisonment for up to five years, or both. For civil penalties, section 195-1 of the Act may apply, imposing fines up to 22,200 penalty units for serious breaches. These penalties underscore the importance of adhering to the requirements set forth by the Act and the TCO.