EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1026112
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 dividers on 10 June 2010.
Instrument
TCO No 1026112 was made on 06 September 2010. It declares that those certain document dividers 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. 1026112 is taken to have come into force on 10 June 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. 1026112 was enacted in 2010 under the Customs Act 1901 to address the need for tariff concessions on specific goods not produced domestically. The instrument was introduced to provide relief on customs duty for goods that do not have Australian-made substitutes, thereby encouraging the importation of these items. The Customs Act 1901 allows the Chief Executive Officer of Customs to make Tariff Concession Orders if certain criteria are met, such as the absence of substitutable goods produced in Australia. In this case, Avery Dennison Office Products Australia applied for a tariff concession on certain document dividers, and the order was made on 6 September 2010, reducing the duty on these goods from 5% to free. The instrument aims to benefit importers by allowing them to apply for refunds of duty on imports since the effective date of the concession.
Scope and Application
The Customs Act 1901 applies to all persons and entities involved in the importation of goods into Australia, as well as those involved in the production of goods within Australia that may be subject to Tariff Concession Orders (TCO). The Act’s geographic reach is national, as it applies across the Commonwealth of Australia. Specifically, the Act allows the Chief Executive Officer of Customs to grant TCOs that apply a lower rate of customs duty to goods imported into Australia, provided the goods do not fall under the category of goods specified in section 269SJ of the Act, which cannot be subject to a TCO. The Act sets out core criteria that an application must meet, such as ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The TCO process also involves public consultation, whereby any objections to the TCO can be lodged with the CEO, although no objections were received for TCO No. 1026112. The TCO itself does not affect the rights of any person, except to the beneficial effect of importers who can apply for refunds of duty on goods imported since the TCO came into effect. The application and effects of TCOs may be further extended or clarified through subordinate instruments.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 1026112 under the Customs Act 1901 (section 269F) allow an applicant to request a Tariff Concession Order (TCO) from the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application meets the core criteria, including that no substitutable goods are produced in Australia (section 269C), the CEO is obligated to issue a TCO. This order specifies that the goods in question are subject to a reduced rate of customs duty, as outlined in the Customs Tariff Act 1995 (section 269P(3)).
In this specific case, Avery Dennison Office Products Australia applied for a TCO on certain document dividers on 10 June 2010. The CEO issued TCO No. 1026112 on 6 September 2010, declaring that these document dividers are subject to item 50 of Schedule 4 of the Tariff, with a duty rate of 0% instead of the general rate of 5%. The TCO became effective from the date of the application, 10 June 2010, under subsection 269S(1) of the Customs Act. The TCO does not affect any pre-existing rights or impose any liabilities on individuals other than the Commonwealth, and importers can apply for a refund of duty paid on these goods since the effective date.
The Customs Act imposes several obligations and requirements on the parties involved. The CEO must ensure that the application for a TCO is not in respect of goods specified in section 269SJ of the Act and must verify that the core criteria are met. Additionally, as per subsection 269K(1) of the Act, the CEO is required to publish a notice in the Gazette inviting any person who believes the TCO should not be granted to submit their reasons. In this instance, no submissions were received. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date.
For breaches of the provisions set out in the Customs Act, the Act includes various offences, penalties, and consequences. However, the Explanatory Statement does not detail specific offences or penalties related to TCOs. In general, the Act may impose civil and criminal penalties for non-compliance with its requirements, including fines and imprisonment. The precise penalties would depend on the nature and severity of the breach, as outlined in other sections of the Customs Act and related legislation.