EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1113892
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.
Schaffer and Co applied for a TCO in respect of certain tape on 02 May 2011.
Instrument
TCO No 1113892 was made on 25 July 2011. It declares that those certain 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. 1113892 is taken to have come into force on 02 May 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, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise duties. It establishes the process for the creation of Tariff Concession Orders (TCOs), which are intended to provide tariff concessions for specific goods under certain conditions. The Customs Act 1901 was amended to include Part XVA, which facilitates the issuance of TCOs by the Chief Executive Officer of Customs, to address gaps in tariff regulation and to provide economic benefits by potentially lowering customs duty rates on certain goods. This legislative change aims to support Australian businesses by reducing costs associated with importing specific goods, thereby enhancing competitiveness and potentially encouraging trade. The policy objective is to ensure that TCOs are granted when it is determined that the goods in question are not produced domestically in the ordinary course of business, and that such concessions do not disadvantage existing stakeholders.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for reduced customs duties on specified goods. This legislation applies to any person or entity seeking to import goods that qualify for such tariff concessions, provided the goods are not explicitly excluded under section 269SJ. The core criteria for approving a TCO application, as outlined in section 269C, necessitates that on the date of application, no substitutable goods are produced in Australia in the ordinary course of business, with definitions for these terms provided in sections 269D, 269E, and 269F. If the CEO finds that these criteria are met, they are mandated to issue a written TCO, as per section 269P(3). This legislative framework ensures that the tariff concessions are granted judiciously and only when no suitable domestic alternatives exist. Additionally, the Act mandates public consultation, requiring the CEO to publish notices in the Gazette inviting submissions on proposed TCOs, although in practice, this may not always result in submissions. The commencement of a TCO is tied to the date the application is lodged, as stipulated in subsection 269S(1), ensuring a swift and effective implementation process. Importantly, the Act also clarifies that TCOs do not retroactively affect the rights or liabilities of individuals or entities, safeguarding against any disadvantage or imposition of new obligations stemming from the concessions.
Key Provisions
The key operative sections of the Customs Act 1901, as applied to Tariff Concession Order (TCO) No. 1113892, provide a framework for the concession of tariffs on certain goods. Section 269F allows a person to apply for a TCO in respect of goods, which, if approved, results in a lower rate of customs duty being applied (section 269C). The CEO of Customs must ensure that the application meets the core criteria, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (section 269C and 269D). If the CEO is satisfied with the application, they must make a written order declaring that the goods are subject to the prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). TCO No. 1113892 specifically applies to certain tape, reducing the duty rate from 5% to free.
The obligations imposed by the Act on the parties involved include the requirement for the CEO to publish a notice in the Gazette, inviting any interested persons to lodge a submission against the TCO if they believe it should not proceed (subsection 269K(1)). Schaffer and Co, as the applicant, must have ensured their application met all criteria, including providing sufficient evidence that no substitutable goods were produced in Australia. The CEO, in turn, is obliged to review the application and decide whether it meets the core criteria, including considering any submissions received.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences. There are no specific offences outlined in the explanatory statement, but any breach of the Act or the Tariff Concession Instrument could potentially lead to civil or criminal penalties. For instance, if a party provides false information in their application, they could face penalties under general law provisions for deceit or fraud. The Act does not specify maximum penalties, but such penalties would typically be determined by the relevant courts based on the severity of the breach. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO, and it imposes no new liabilities on any person, thus providing a measure of protection against unintended consequences.