EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021329
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.
Viridian applied for a TCO in respect of certain rollers on 11 May 2010.
Instrument
TCO No 1021329 was made on 19 July 2010. It declares that those certain rollers 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. 1021329 is taken to have come into force on 11 May 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 Tariff Concession Instrument No. 1021329 was enacted under the Customs Act 1901 to provide tariff concessions for certain goods, in this case specific rollers, and is aimed at facilitating smoother importation processes by reducing or eliminating customs duties on these items. The instrument was introduced to address the need for tariff relief where no substitutable goods are produced in Australia, thus ensuring that Australian industries are not unfairly disadvantaged. This legislative action was taken by the Chief Executive Officer of Customs, who is mandated under section 269F of the Act to consider and decide on applications for Tariff Concession Orders (TCOs). The policy objective behind this measure is to support importers by providing duty-free access to specific goods, thereby potentially lowering costs and encouraging trade.
Following the application by Viridian on 11 May 2010, and after confirming that no substitutable goods were produced domestically, the CEO issued TCO No. 1021329 on 19 July 2010, making the specified rollers eligible for a free duty rate, which contrasts with the general 5% duty rate. This order came into effect on the date of the application, 11 May 2010, without affecting pre-existing rights or imposing new liabilities on entities other than the Commonwealth. Importers of these rollers can now benefit from this concession and may also apply for duty refunds for goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, allows for the issuance of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO), which provide for lower rates of customs duty on certain goods. This legislation applies to any person or entity seeking to import goods that are not specified in section 269SJ of the Act as ineligible for tariff concessions. The geographic reach of this Act is national, as it pertains to the Commonwealth's customs duties. Exclusions apply to goods that are substitutable and produced in Australia in the ordinary course of business, as per sections 269C and 269D of the Act. Any subordinate instruments that may extend or restrict the application of this Act would need to comply with the core criteria outlined in the Act. The Tariff Concession Instrument No. 1021329, made on 19 July 2010, exemplifies the application of this legislation by providing a tariff concession for certain rollers, effectively setting their duty rate to free, whereas the general rate is 5%. This instrument came into force on 11 May 2010, the date the application was lodged, and does not impose any liabilities on persons other than the Commonwealth, nor does it affect pre-existing rights or impose liabilities in respect of actions taken before the registration date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1021329, which was made under section 269F of the Customs Act 1901, declare that certain rollers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. This means that a lower rate of customs duty applies to these goods, specifically a rate of free duty, as opposed to the general rate of 5% (section 269P(3)). The instrument was made following an application by Viridian on 11 May 2010 and it came into force on the same date, as per subsection 269S(1) of the Act.
The obligations imposed by this legislation include the requirement for the Chief Executive Officer of Customs (CEO) to assess applications for Tariff Concession Orders (TCOs) under section 269F. The CEO must ensure that the application does not pertain to goods specified in section 269SJ of the Act and must determine if the application meets the core criteria outlined in sections 269B and 269C. These sections detail the conditions under which goods can be considered for a tariff concession, specifically that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, subsection 269K(1) mandates that the CEO must publish a notice in the Gazette, inviting submissions from interested parties if the application is accepted as valid. In this case, no submissions were received, which facilitated the issuance of the TCO.
In terms of penalties and consequences for breach, the Act does not explicitly detail specific penalties for failing to comply with the provisions of a TCO or the process for applying for a TCO. However, non-compliance with customs regulations generally can result in a range of civil and criminal penalties, including fines and imprisonment, depending on the severity and intent of the breach. For instance, knowingly making a false statement in a customs declaration can lead to a penalty of up to 10 years imprisonment under section 238 of the Customs Act 1901. The TCO itself, however, does not introduce new penalties but rather modifies the rate of duty applicable to certain goods.