EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1122360
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.
Faber Castel Pty Ltd applied for a TCO in respect of certain glue sticks on 05 July 2011.
Instrument
TCO No 1122360 was made on 19 September 2011. It declares that those certain glue sticks 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. 1122360 is taken to have come into force on 05 July 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 Tariff Concession Instrument No. 1122360, made under the Customs Act 1901, was enacted to address the need for tariff concessions on specific goods that were not being produced in Australia, thereby ensuring fair trade practices. This instrument was introduced to streamline the process for granting tariff concessions, ensuring that such concessions are applied correctly and efficiently. The Customs Act 1901, administered by the Parliament of Australia, aims to regulate the importation of goods into Australia, including the application of customs duties. The policy objective of this instrument is to provide relief from customs duties for certain goods where no substitutable domestic alternatives exist, thereby promoting economic efficiency and competitiveness. The instrument was published in the Gazette on 19 September 2011, following an application by Faber Castel Pty Ltd for tariff concessions on certain glue sticks, effective from 5 July 2011.
Scope and Application
The Tariff Concession Instrument No. 1122360, made under the Customs Act 1901, applies to the specific goods—certain glue sticks—for which Faber Castel Pty Ltd applied for a Tariff Concession Order (TCO). The Act facilitates the reduction of customs duty on goods through the issuance of TCOs by the Chief Executive Officer of Customs, provided that the goods do not fall under the prohibited category outlined in section 269SJ of the Act and meet the core criteria specified in section 269C. This includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. Once the CEO determines that these criteria are met, a TCO is issued, as occurred with Instrument TCO No 1122360, which came into force on 5 July 2011. The TCO applies to the Commonwealth jurisdiction and does not disadvantage any person by affecting their rights as of the registration date or impose liabilities for actions taken prior to registration. The rights of importers are positively affected, as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) provides a framework for Tariff Concession Orders (TCOs), as outlined in Part XVA. Specifically, section 269F allows for the application to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application is not for goods specified in section 269SJ, the CEO must determine if the application meets the core criteria as set out in section 269C. For a TCO to be granted, the application must satisfy the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Definitions for terms like "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
Under this legislation, the CEO has specific obligations once an application for a TCO is received. As per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested party to submit reasons why the TCO should not be made. In the case of TCO No. 1122360, Faber Castel Pty Ltd's application for certain glue sticks, the CEO did not receive any submissions. Additionally, once the core criteria are met, the CEO is mandated to make a written order specifying that the goods in question are subject to a prescribed tariff item, thus granting the concession.
The Act outlines the potential consequences for non-compliance with its provisions. However, the specific offences and penalties are not detailed within the given sections of the Act or Explanatory Statement. Typically, breaches of customs regulations can lead to civil and criminal penalties, including fines and imprisonment, depending on the severity of the breach. For precise details on penalties, one would need to refer to the relevant sections of the Customs Act 1901 and associated regulations.
The TCO does not adversely affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person other than the Commonwealth. Importers of the affected goods will benefit from the TCO by being able to apply for a refund of duty on goods imported since the effective date of the TCO, which is the date the application was lodged (section 269S). This ensures that the rights and interests of all parties are protected, while still allowing for the tariff concessions to be applied as intended.