EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1127479
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.
Gunnersen applied for a TCO in respect of certain chalkboard on 15 August 2011.
Instrument
TCO No 1127479 was made on 07 November 2011. It declares that those certain chalkboard 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. 1127479 is taken to have come into force on 15 August 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 Commonwealth Parliament, establishes a framework for the administration of customs and excise, including the creation of Tariff Concession Orders (TCOs) to reduce customs duty on specific goods. The Tariff Concession Instrument No. 1127479, introduced to address the need for tariff concessions on certain chalkboards, was made under this Act. The policy objective was to facilitate the import of these goods by granting a tariff concession, thereby ensuring that no substitutable goods were produced in Australia. This instrument was made on 7 November 2011, following Gunnersen's application on 15 August 2011, and was effective from the date of application. The process involved publication in the Gazette to invite submissions, none of which were received. The TCO provides a duty-free rate for the specified chalkboards, benefiting importers who can apply for refunds on duties paid before the concession came into effect.
Scope and Application
The Tariff Concession Instrument No. 1127479, made under Part XVA of the Customs Act 1901, applies to an individual or entity that has applied for a Tariff Concession Order (TCO) for specific goods, in this case, certain chalkboards. The scope of this legislation encompasses the process by which a TCO can be granted by the Chief Executive Officer of Customs, contingent upon the absence of substitutable goods produced in Australia. The Act provides a lower rate of customs duty on goods specified in a TCO, which is intended to benefit importers by potentially reducing their customs duty liabilities. The geographic reach of this legislation is national, as it operates under the Commonwealth's customs framework. Importantly, the Act does not disadvantage any person, including the Commonwealth, in terms of rights or liabilities incurred prior to the registration of the TCO. The Act’s application is not limited by specific exclusions beyond those outlined in section 269SJ, which details goods that cannot be subject to a TCO. The commencement of the TCO aligns with the date the application was lodged, ensuring that any rights of importers are protected from retroactive disadvantage.
Key Provisions
The main operative sections of the legislation (sections 269C, 269P(3) and 269S) establish the framework for the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269C outlines the core criteria that an application for a TCO must meet, which requires that no substitutable goods are produced in Australia in the ordinary course of business. Section 269P(3) mandates that if these core criteria are satisfied, the Chief Executive Officer of Customs (CEO) must issue a TCO, which specifies the goods and the reduced rate of customs duty. Section 269S stipulates that the TCO comes into effect on the date the application was lodged.
The Act imposes specific obligations on the CEO, who must assess whether an application meets the core criteria as per section 269C. If the application is deemed valid and the CEO is satisfied with the core criteria, a written order must be issued under section 269P(3). Additionally, as per subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from interested parties on the proposed TCO. This ensures transparency and provides an opportunity for public input before a final decision is made.
Failure to comply with the requirements set forth in the Customs Act 1901 can result in legal consequences. While the Act does not explicitly detail specific offences or penalties for non-compliance with TCOs, breaches of the Customs Act generally can result in substantial fines and potential imprisonment. The exact penalties would depend on the specific breach and the relevant provisions of the Customs Act 1901 and other related legislation.
The Customs Act 1901 also outlines the rights of importers and the impact of TCOs on their duties. Under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the date the TCO is deemed to have come into force. This ensures that importers are not disadvantaged by the retroactive application of TCOs and can benefit from the reduced duty rates as intended by the legislation.
Finally, the Act ensures that the implementation of a TCO does not adversely affect the rights of individuals or entities other than the Commonwealth. It explicitly states that the TCO does not impose any liabilities on any person for actions taken prior to the registration of the TCO, thereby protecting existing rights and obligations.