EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021966
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.
Avery Dennison Office Products Australia applied for a TCO in respect of certain document covers on 17 May 2010.
Instrument
TCO No 1021966 was made on 02 August 2010. It declares that those certain document covers 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. 1021966 is taken to have come into force on 17 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 Customs Act 1901 was enacted by the Australian Parliament to provide a comprehensive framework for the regulation of customs and excise. The act addresses the need for streamlined and effective management of imports and exports, ensuring that the flow of goods across the country's borders is properly controlled and taxed. Part XVA of the Act introduces the scheme under which Tariff Concession Orders (TCOs) can be made, aiming to provide relief from customs duty for specific goods, subject to certain conditions. The introduction of TCOs was intended to foster economic efficiency by potentially reducing the cost of imported goods, thus benefiting businesses and consumers.
The Tariff Concession Instrument No. 1021966, made on 2 August 2010, is an example of this scheme in action. In this case, Avery Dennison Office Products Australia applied for a TCO for certain document covers, which was subsequently granted as the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia. This order effectively reduces the customs duty on these specific goods from 5% to free, thereby lowering the import costs for these items. The policy objective here is to provide tariff relief where appropriate, promoting competitive markets and potentially lowering consumer prices.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods. This mechanism applies to any individual or entity seeking tariff concessions for goods not specified in section 269SJ, which excludes certain goods from eligibility for a TCO. For a TCO to be issued, the CEO must be convinced that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. This legislative framework operates at the national level, impacting import duties across all states and territories of Australia. The TCOs extend their benefits to importers by allowing them to apply for duty refunds on goods imported since the TCO came into effect, without imposing any liabilities on them. The application process involves public consultation as stipulated by section 269K, though in the case of TCO No. 1021966, no submissions were received. The commencement of a TCO aligns with the date of the application, ensuring that the benefits are retroactive to the application date.
Key Provisions
The main sections of this legislation revolve around the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question are not specified in section 269SJ. Section 269C outlines the core criteria for approval, which includes the absence of substitutable goods produced in Australia as of the application date (section 269D). If the CEO is satisfied that the application meets these criteria, they are obligated to issue a written order under section 269P(3). The TCO specifies that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, thereby altering the duty rate.
The obligations imposed by this Act on the parties and entities it governs include the requirement for the CEO to evaluate the validity of a TCO application against the core criteria specified in section 269C. The CEO must also publish a notice in the Gazette under section 269K(1) as soon as practicable after accepting an application, inviting any interested parties to submit reasons why the TCO should not be made. This process ensures transparency and provides an opportunity for public input. The CEO must make a written order if the application meets the core criteria, as mandated by section 269P(3).
Failure to comply with the provisions of this Act can lead to civil and criminal consequences. Although the explanatory statement does not explicitly detail offences or penalties, it is implicit that breaches of the customs duty and tariff regulations could result in fines or other legal repercussions. The general rate of duty on the goods subject to the TCO is 5%, but under the TCO, the rate is free. Any non-compliance with the terms of the TCO, such as improper claims for duty exemptions, could attract penalties under the broader customs legislation.