EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136457
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.
Admil Adhesives applied for a TCO in respect of certain cartridge line on 02 November 2011.
Instrument
TCO No 1136457 was made on 23 January 2012. It declares that those certain cartridge line 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. 1136457 is taken to have come into force on 02 November 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. 1136457, enacted in 2012, is a measure under the Customs Act 1901 designed to provide relief to certain importers by reducing customs duty rates for specified goods. This instrument was introduced to address the problem of ensuring fair trade practices by allowing tariff concessions on goods where no substitutable Australian-produced goods exist. The enacting body responsible for this instrument is the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. The primary policy objective is to facilitate the importation of goods by reducing financial barriers, thereby promoting trade and benefiting importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1136457, made under the Customs Act 1901, applies to specific goods as declared by the Chief Executive Officer of Customs (CEO) upon the satisfaction that these goods are not substitutable by any goods produced in Australia and meet the core criteria outlined in the Act. The instrument pertains to certain cartridge line goods, granting them a tariff concession that effectively makes the customs duty on these goods free, whereas the general rate of duty on such goods is 5%. This legislation impacts importers of these specific goods by allowing them to apply for a refund of duty on goods imported since the day the Tariff Concession Order (TCO) is deemed to have come into force. Importantly, the TCO does not affect the rights of any person or impose any liabilities on them in relation to actions taken before the TCO's effective date. The instrument extends its application nationally, as per the Customs Act 1901, which operates across the Commonwealth of Australia. Any subordinate instruments or regulations that further define the scope or application of the TCO would need to be considered in conjunction with this primary legislation.
Key Provisions
The main operative sections of the Customs Act 1901, relevant to Tariff Concession Orders (TCOs), include sections 269C, 269F, 269K, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is deemed valid and meets the core criteria outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed tariff item. This means that a lower or free rate of customs duty applies to these goods. Additionally, section 269K requires the CEO to publish a notice in the Gazette inviting submissions from the public on the application. Section 269P details the process by which the CEO must make a TCO if the application meets the core criteria, and section 269SJ specifies the types of goods that cannot be subject to a TCO.
The Act imposes several obligations and requirements on the parties involved. Firstly, any person seeking a TCO must submit an application to the CEO. This application must not be in respect of goods specified in section 269SJ, which outlines the exceptions. Once the application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested party to submit objections or reasons why the TCO should not be made. The CEO must then decide whether the application meets the core criteria. If the criteria are met, the CEO must make a written TCO. This process ensures transparency and allows for public consultation.
There are potential consequences for non-compliance with the requirements of the Customs Act 1901. Although the explanatory statement does not detail specific offences or penalties for breach of TCO provisions, the general framework of the Act includes provisions for civil and criminal penalties for breaches of customs regulations. For example, section 243 of the Act provides for fines and imprisonment for offences such as making false statements or evading duty. Therefore, any failure to comply with the obligations or requirements under the Act, including those related to TCOs, could potentially lead to these broader penalties under the Act.
In summary, the Customs Act 1901 establishes a clear process for applying for and granting Tariff Concession Orders, ensuring that certain goods can benefit from reduced or free customs duty. It imposes obligations on applicants and the CEO to follow a transparent and consultative process. While specific penalties for breach of TCO provisions are not detailed, the general penalties under the Act for breaches of customs regulations provide a framework for enforcement.