EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1029333
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.
Ribtex International applied for a TCO in respect of certain craft articles on 30 June 2010.
Instrument
TCO No 1029333 was made on 29 September 2010. It declares that those certain craft articles 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. 1029333 is taken to have come into force on 30 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act aims to provide relief from customs duties for specific goods, fostering trade by reducing the financial burden on importers. This legislative instrument, F2010L02958, was introduced to address the need for tariff concessions on certain imported goods, specifically addressing a gap in the availability of domestically produced alternatives. The policy objective is to encourage the importation of goods that are not produced in Australia, thereby enhancing market competition and consumer choice. The instrument, TCO No. 1029333, was implemented following an application by Ribtex International for tariff concessions on certain craft articles, resulting in a duty-free status for these goods, effective from 30 June 2010.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, specifically in the context of tariff concession orders (TCOs). The Act empowers the Chief Executive Officer of Customs to grant TCOs which provide for reduced or free customs duty on certain goods, subject to specific criteria being met. The Act applies across the Commonwealth of Australia and provides for the potential application of TCOs to a wide range of goods, although certain items are excluded under section 269SJ. The Act allows for the creation of subordinate instruments to further define and expand upon its application, although no such instruments are referenced in this context. The process for applying for a TCO involves meeting core criteria, including ensuring that no substitutable goods are produced in Australia, and undergoing consultation with interested parties. The application of TCOs is retroactive to the date of application lodging, and does not affect existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The key operative sections of this legislation include sections 269F, 269C, 269B, and 269P of the Customs Act 1901. Section 269F allows an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO is satisfied that the application is valid, they must consider whether it meets the core criteria set out in section 269C. This section stipulates that the application meets the criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions relevant to these criteria are provided in sections 269B and 269D. If the CEO determines that the application meets the criteria, they are required under section 269P(3) to make a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The Customs Act 1901 imposes specific obligations on the CEO with respect to TCO applications. Under section 269K, once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO. In the case of TCO No. 1029333, the CEO did not receive any submissions in response to this invitation. Furthermore, section 269S specifies that a TCO is considered to come into force on the date the application was lodged, which, in this case, was 30 June 2010. Importantly, the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken before the registration date. Instead, the TCO aims to beneficially affect the rights of importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Breaching the provisions of the Customs Act 1901 can have various legal consequences, both civil and criminal. While the explanatory statement does not detail specific offences related to TCO applications, general provisions of the Customs Act outline penalties for breaches. For instance, section 201 of the Act provides that a person who contravenes a provision of the Act is liable to a penalty of up to 10,000 penalty units, which as of 2023 equates to approximately AUD 1.85 million for individuals and AUD 9.25 million for bodies corporate. Additionally, criminal penalties may apply, with the potential for imprisonment depending on the severity of the breach. The precise penalties for any specific breach would depend on the nature and circumstances of the contravention.