EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041327
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.
Smith & Nephew Aust Pty Ltd applied for a TCO in respect of certain zinc oxide tape on 7 September 2010.
Instrument
TCO No 1041327 was made on 29 November 2010. It declares that those certain zinc oxide tape 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. 1041327 is taken to have come into force on 7 September 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, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This legislative mechanism allows for the reduction of customs duties on specific goods, thereby addressing issues of economic accessibility and competitiveness. The Tariff Concession Instrument No. 1041327, enacted in 2010, serves as an example of how this framework is applied. In this instance, Smith & Nephew Aust Pty Ltd applied for a TCO concerning certain zinc oxide tape, and upon approval by the Chief Executive Officer of Customs, the instrument was registered, granting a duty-free status to these goods. This legislative tool aims to support Australian businesses by reducing the cost of imported goods, facilitating better market access without disadvantaging existing rights or imposing new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1041327, issued under the Customs Act 1901, pertains to the application of tariff concession orders (TCOs) for certain zinc oxide tape products. This instrument applies to the entity that lodged the application, Smith & Nephew Aust Pty Ltd, and to the goods specified in the order, which are subject to a tariff concession. The geographic reach of this Act is national, as it operates within the framework established by the Commonwealth of Australia. The application of this instrument is restricted to goods that are not specified in section 269SJ of the Act, which excludes certain goods from tariff concessions. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed items and rates of duty. The instrument became effective on 7 September 2010, the date on which the application was lodged, and it does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person.
Key Provisions
The main operative sections of the Customs Act 1901, particularly as they relate to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the application meets the core criteria, as stipulated in section 269C, the CEO must issue a TCO. Section 269P outlines the process whereby, if the CEO determines that the application meets the criteria, a written TCO is made, and section 269S outlines the commencement of the TCO. Specifically, TCO No. 1041327, made in respect of certain zinc oxide tape, was issued because the CEO was satisfied that no substitutable goods were produced in Australia at the time the application was lodged.
The Customs Act 1901 imposes several obligations and requirements on the parties involved. The CEO is required to assess whether a TCO application meets the core criteria, which involves verifying that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). If the application is valid, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). In this case, no submissions were received. The TCO itself must be made in writing and declare that the specified goods are subject to the prescribed item in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)). Importantly, the TCO does not affect any rights or impose any liabilities on any person (other than the Commonwealth) as at the date of registration, nor does it disadvantage any person or impose liabilities for actions taken before the registration date (subsection 269S(1)).
Breaching the requirements of the Customs Act 1901 or attempting to circumvent the provisions of a TCO can lead to various legal consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO, general provisions under the Customs Act 1901 could apply. For example, non-compliance with customs duties and regulations can result in penalties, including fines and imprisonment. For instance, under section 255 of the Customs Act 1901, an offence of fraud or attempted fraud against customs can attract a penalty of up to 10 years imprisonment. Additionally, under section 255A, an offence involving knowingly or recklessly making a false statement can attract a penalty of up to five years imprisonment. These provisions underscore the seriousness with which breaches of customs regulations are treated.