EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139626
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.
Pilot Pen Australia applied for a TCO in respect of certain pens on 28 November 2011.
Instrument
TCO No 1139626 was made on 15 February 2012. It declares that those certain pens 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. 1139626 is taken to have come into force on 28 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 Customs Act 1901 was enacted by the Parliament of Australia and it provides the framework for managing customs and excise in Australia. The Act was introduced to address the need for a comprehensive legislative scheme governing the collection of customs duty and excise, and to regulate the importation and exportation of goods. The Tariff Concession Instrument No. 1139626 was introduced to provide a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on certain goods, thereby reducing the customs duty applied to those goods. This instrument was created in response to an application from Pilot Pen Australia for a tariff concession on certain pens, where it was determined that no substitutable goods were produced in Australia. The policy objective is to facilitate trade by reducing the duty on specific goods, thereby making them more competitively priced and accessible in the Australian market.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to apply a lower rate of customs duty on specified goods. The Act applies to any person or entity that seeks to import goods into Australia and to the CEO who has the authority to make TCOs based on applications that meet specific criteria. The legislation specifically excludes goods listed in section 269SJ from being subject to a TCO. The geographic reach of the Act is national, applying across all states and territories of Australia. The application of the Act may be extended or restricted through subordinate instruments, although this particular TCO (No. 1139626) does not impose any liabilities on individuals or entities other than the Commonwealth. The TCO provides relief to importers by allowing a refund of duty on goods imported since the date the TCO was taken to have come into force, which was 28 November 2011 for this specific case.
Key Provisions
The Tariff Concession Instrument No. 1139626, made under section 269C of the Customs Act 1901, pertains to Tariff Concession Orders (TCOs) for certain types of pens. Section 269C sets the fundamental criteria for a TCO, which must be met for the CEO to consider an application for such an order. Specifically, the application must meet the core criteria established by section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The terms "substitutable goods," "goods produced in Australia," and "ordinary course of business" are further defined by sections 269D, 269E, and 269F respectively. If these criteria are met, the CEO is obligated to make a written order that declares the goods subject to a prescribed rate of duty.
Entities such as Pilot Pen Australia, which applied for a TCO, must ensure their applications comply with these provisions. The CEO, upon reviewing the application, must determine whether the goods specified in the application are substitutable and whether any such goods were produced in Australia in the ordinary course of business on the application date. If the CEO is satisfied that the application meets the core criteria, a TCO is made, declaring that the goods are subject to a specific item in Schedule 4 of the Customs Tariff Act 1995. In this case, the pens in question are subject to a duty rate of free, as opposed to the general rate of 5%.
Upon acceptance of a TCO application, section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be granted. In this instance, no submissions were received, indicating no objections were raised. The TCO comes into force on the day the application was lodged, as per subsection 269S(1), which in this case was 28 November 2011. This commencement date ensures that any rights affected by the TCO, such as the right to apply for a refund of duty on imported goods, are protected and do not impose any new liabilities on persons other than the Commonwealth.
Should any party fail to comply with the provisions of the Customs Act 1901 or the terms of the TCO, they may face civil or criminal penalties. The specific penalties for breaches are not detailed in the provided text, but generally, under Australian law, non-compliance with customs regulations can result in fines and, in severe cases, imprisonment. The precise penalties would depend on the nature and severity of the breach, as well as other relevant legal provisions.