EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046814
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.
Acme Fireworks applied for a TCO in respect of certain fireworks on 19 October 2010.
Instrument
TCO No 1046814 was made on 12 January 2011. It declares that those certain fireworks 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. 1046814 is taken to have come into force on 19 October 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 Parliament of Australia, addresses the need for a structured scheme under which Tariff Concession Orders (TCOs) can be applied to certain goods. This scheme facilitates the reduction or exemption of customs duties on specific goods, provided they meet certain criteria and do not substitute goods already produced in Australia. The Act allows for applications to the Chief Executive Officer of Customs, who is responsible for determining whether an application meets the core criteria set out in the Act, primarily focusing on the non-existence of substitutable goods produced in Australia. The 2011 Tariff Concession Instrument No. 1046814 exemplifies this process, as it was enacted following an application by Acme Fireworks for a TCO on certain fireworks, resulting in a reduction of the duty rate from 5% to free. The policy objective underlying this instrument is to encourage the importation of goods that are not domestically produced, thereby supporting economic activities and potentially lowering costs for consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to individuals or entities seeking tariff concessions on certain goods, ensuring they meet the criteria that the goods are not substitutable by any goods produced in Australia in the ordinary course of business. The scope of this legislation extends across the Commonwealth of Australia, impacting any person or entity engaged in the import of goods subject to such tariff concessions. Acme Fireworks' application for a TCO concerning specific fireworks exemplifies the application of this Act, where the CEO was satisfied that no substitutable goods were produced domestically, thus permitting the concession. The TCO's commencement date aligns with the date of application, and it does not retroactively affect the rights or liabilities of parties other than the Commonwealth, thereby protecting importers' interests by allowing duty refunds for imports since the effective date of the TCO.
Key Provisions
The Tariff Concession Order No. 1046814, issued under the Customs Act 1901 (section 269F), pertains to specific fireworks and the application of a lower rate of customs duty, in this case, free instead of the general 5% duty (section 269P(3)). The order was made after Acme Fireworks submitted an application on 19 October 2010, and it became effective on that same date (subsection 269S(1)). This instrument was created in accordance with the legislative requirements that ensure the goods in question are not substitutable by Australian-made products and are not prohibited from tariff concessions (section 269C, 269SJ). The Chief Executive Officer of Customs (CEO) must ensure that no such substitutable goods were produced in Australia at the time the application was lodged (section 269C).
The obligations imposed by this legislation include the CEO's duty to assess applications against the core criteria set forth in section 269C of the Customs Act 1901. Specifically, the CEO must determine whether the goods in question are substitutable by Australian-made products and whether they fall within the prohibited category outlined in section 269SJ. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting public submissions on the application. In this case, no submissions were received, which facilitated the issuance of the TCO. Importers are afforded the benefit of applying for a refund of any duty paid on the specified goods since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Failure to comply with the requirements of the Customs Act 1901 in the context of Tariff Concession Orders could result in various civil or criminal consequences. For instance, if an entity submits a false application for a TCO, knowing it does not meet the criteria, this could be considered a fraudulent act, potentially leading to criminal charges. The penalties for such offences are determined under the applicable criminal law provisions and can include fines and imprisonment. Additionally, any person who knowingly contravenes the provisions of the Customs Act 1901 or its regulations may be subject to civil penalties, which can include substantial fines as stipulated in the relevant sections of the Act. It is essential for all parties involved to adhere to the legislative requirements to avoid these potential legal ramifications.