EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1112410
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.
Jasco applied for a TCO in respect of certain highlighter pens on 13 April 2011.
Instrument
TCO No 1112410 was made on 04 July 2011. It declares that those certain highlighter pens 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. 1112410 is taken to have come into force on 13 April 2011.
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 was enacted by the Australian Parliament and provides a framework for the regulation of customs and excise in Australia. The Act was introduced to address the need for a comprehensive legislative structure governing the importation and exportation of goods, including the collection of customs duty and excise. One mechanism under the Customs Act is the provision for Tariff Concession Orders (TCOs), which can be made by the Chief Executive Officer of Customs (CEO) to offer lower rates of customs duty on specified goods, provided certain criteria are met. Tariff Concession Instrument No. 1112410, made under the Customs Act, was introduced to provide a tariff concession for certain highlighter pens, allowing for free duty on these goods, thereby addressing a specific economic or trade policy objective to facilitate the importation of these goods without the burden of duty.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which apply reduced rates of customs duty to specified goods. This mechanism is designed to encourage the production of certain goods within Australia by making imported alternatives more expensive, thereby supporting local industries. A TCO application can be submitted by any person, provided the goods in question are not specified in section 269SJ of the Act as ineligible. The CEO must ensure that no substitutable goods are produced in Australia at the time the application is lodged, as outlined in section 269C. If this condition is met, the CEO issues a TCO, applying a lower rate of duty to the specified goods, as defined in Schedule 4 to the Customs Tariff Act 1995. In the case of Jasco's application for highlighter pens, the CEO determined that no suitable Australian-made alternatives existed and hence approved a TCO, resulting in the duty on these highlighter pens being set at free rather than the general rate of 5%. The TCO does not affect pre-existing rights or liabilities of any party except the Commonwealth and can be challenged through submissions to the CEO following publication in the Gazette.
Key Provisions
The Tariff Concession Order (TCO) No. 1112410, as provided in the Customs Act 1901, sets forth specific provisions regarding the concession of customs duties for certain highlighter pens. Section 269F allows for an application to be made by any person to the Chief Executive Officer (CEO) of Customs for a TCO. Section 269C stipulates that the CEO must consider whether the application meets the core criteria, specifically if, on the day the application was lodged, no substitutable goods were being produced in Australia in the ordinary course of business. Furthermore, Section 269P(3) mandates that if the CEO is satisfied the application meets the criteria, a written TCO must be issued, as was the case with TCO No. 1112410.
The TCO imposes obligations on the parties it governs, primarily ensuring that the CEO of Customs carefully assesses applications to determine if the core criteria are met. The CEO must also publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be granted, as per Section 269K(1). For TCO No. 1112410, no submissions were received, indicating a lack of opposition to the concession. Additionally, the TCO does not affect any rights of individuals other than the Commonwealth, nor does it impose any liabilities on such individuals before the date of registration, as specified in Section 269S(1).
Under the Customs Act 1901, breaches or non-compliance with the conditions set out in a TCO may lead to civil or criminal consequences. However, the explanatory statement for TCO No. 1112410 does not explicitly mention any specific offences, penalties, or consequences for breach. The primary focus of the TCO is to facilitate the concession of customs duties for the specified highlighter pens without creating new liabilities or adversely affecting the rights of importers or other individuals. The TCO allows for a refund of duty on goods imported since the day the TCO is deemed to have come into force, as outlined in paragraph 126(1)(r) of the Regulations.