EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132539
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.
Powersource Global applied for a TCO in respect of certain tobacco tin boxes on 23 September 2011.
Instrument
TCO No 1132539 was made on 19 December 2011. It declares that those certain tobacco tin boxes 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. 1132539 is taken to have come into force on 23 September 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. 1132539, enacted in 2011, addresses the issue of applying tariff concessions on specific goods, in this case, tobacco tin boxes, under the Customs Act 1901. This instrument was introduced to provide a framework for the Chief Executive Officer of Customs to grant tariff concessions when certain criteria are met, particularly when the goods in question are not substitutable by Australian-produced goods. The policy objective is to facilitate trade by reducing customs duties on imported goods where appropriate, thereby encouraging import activities and potentially benefiting the economy. The instrument was enacted by the Parliament of Australia and aims to streamline the process of tariff concessions while ensuring that no existing rights or liabilities are adversely affected by its provisions.
Scope and Application
The Tariff Concession Instrument No. 1132539, made under the Customs Act 1901, applies to the specific case of certain tobacco tin boxes that Powersource Global sought a tariff concession for. This instrument allows for a lower rate of customs duty on these goods, reducing the duty from the general rate of 5% to a free rate as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The Chief Executive Officer of Customs (CEO) made this decision after being satisfied that no substitutable goods were produced in Australia in the ordinary course of business, thereby meeting the core criteria set out in the Customs Act. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia. The application of the Tariff Concession Order (TCO) does not disadvantage any person or impose liabilities on anyone except the Commonwealth and is effective from the date the application for the TCO was lodged. The CEO published a notice in the Gazette inviting submissions against the TCO, but no submissions were received. The TCO does not affect the rights of any person except the Commonwealth and allows for the refund of duty on imported goods since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, in relation to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, provided the goods are not specified in section 269SJ. Section 269C details the core criteria that the CEO must satisfy before making a TCO, which includes ensuring that no substitutable goods are produced in Australia on the day the application was lodged, as defined by sections 269D and 269E. If the CEO is satisfied with the application, section 269P(3) mandates that a written order be made, declaring the goods to which a specified item in Schedule 4 of the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by the Customs Act 1901 on parties applying for a TCO include ensuring that their application is made in respect of goods that meet the criteria set out in section 269C. This includes demonstrating that no substitutable goods are produced in Australia on the day the application was lodged. The CEO has the responsibility to assess these applications against the criteria, and if satisfied, must make a written TCO order. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who might have reasons to oppose the TCO, as outlined in section 269K(1).
Breaches of the provisions in the Customs Act 1901 related to TCOs could lead to civil or criminal consequences. While the explanatory statement does not detail specific offences or penalties, it is reasonable to infer that non-compliance with the legislative requirements for making or applying for a TCO could lead to legal action. The severity of such consequences would depend on the nature and extent of the breach, potentially including fines or other penalties as prescribed by relevant legislation. The Act’s provisions ensure that any TCO does not affect the rights of persons other than the Commonwealth in respect of actions taken before the TCO registration date, thus protecting against retroactive disadvantages or liabilities.