EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1054966
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.
Magic Whiteboard Plus Pty Ltd applied for a TCO in respect of certain polypropylene rolls in film on 17 December 2010.
Instrument
TCO No 1054966 was made on 16 March 2011. It declares that those certain polypropylene rolls in film 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. 1054966 is taken to have come into force on 17 December 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, established a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. The Act was introduced to address the need for a mechanism that allows for the reduction or elimination of customs duties on certain imported goods under specific conditions, thereby facilitating trade and economic activity. The Explanatory Statement for Tariff Concession Instrument No. 1054966, made under the Customs Act 1901, details the process and criteria for granting such concessions, particularly focusing on ensuring that the goods subject to a TCO are not being produced domestically. The policy objective behind this legislation is to support importers by providing tariff relief on goods where no domestic substitutes are available, thus encouraging competition and potentially lowering prices for consumers.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 1054966, facilitates the application of lower customs duties on certain goods through Tariff Concession Orders (TCOs) issued by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking tariff concessions for goods that are not specified in section 269SJ of the Act, which excludes particular goods from being subject to a TCO. The geographic reach of this legislation is national, applying across Australia, as it pertains to the importation of goods into the country. The Act mandates that a TCO application must meet core criteria, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO is required to issue a TCO that specifies the reduced duty rate applicable to the goods. The commencement of this TCO is deemed to be effective from the date the application was lodged, ensuring that any duties paid before the TCO's effective date can be refunded to importers. The Act ensures that the imposition of duties under a TCO does not disadvantage any person other than the Commonwealth and does not retroactively impose liabilities.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to this Tariff Concession Order (TCO) include sections 269C, 269B, 269E, 269D, 269P, and 269SJ. Section 269C of the Act requires that for a TCO to be granted, there must be no substitutable goods produced in Australia on the day the application is lodged. Section 269B defines the terms 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (the TCO). Section 269SJ lists the goods that cannot be subject to a TCO.
The obligations and requirements imposed by the Act on the parties governed by it include ensuring that applications for a TCO are made in accordance with the criteria set out in section 269C. The CEO must also determine whether the application meets the core criteria as per section 269C, and if satisfied, make a written order as per section 269P(3). The CEO must also publish a notice in the Gazette under subsection 269K(1) and invite 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.
Breaching the conditions set out in the Customs Act 1901 can result in criminal and civil penalties. For instance, section 284 of the Act imposes a maximum penalty of 10,000 penalty units or imprisonment for five years, or both, for an offence of contravening a provision of the Act or the Regulations. Further, subsection 269Q(2) of the Act provides that if a person contravenes a provision of the Act or the Regulations in relation to a TCO, the person is liable to pay a pecuniary penalty not exceeding the greater of three times the value of the goods or $11,000. Therefore, it is important for all parties to comply with the Act and the Regulations to avoid any legal consequences.