EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0504720
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.
Target Australia Pty Ltd applied for a TCO in respect of certain fondue sets on 26 April 2005.
Instrument
TCO No 0504720 was made on 09 September 2005. It declares that those certain fondue sets 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. 0504720 is taken to have come into force on 26 April 2005.
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 to provide a comprehensive framework for the administration of customs and excise duties, among other things. The Act was introduced to address the need for a structured legal regime governing the collection of customs duties and the regulation of imported goods. This explanatory statement pertains to Tariff Concession Instrument No. 0504720, which was made under the authority of the Customs Act 1901. The Tariff Concession Order (TCO) No. 0504720 was issued by the Chief Executive Officer of Customs on 9 September 2005, in response to an application from Target Australia Pty Ltd for tariff concessions on certain fondue sets. The order was made after it was determined that no substitutable goods were produced in Australia at the time of the application, thereby satisfying the core criteria set out in section 269C of the Act. The policy objective in this instance was to provide tariff relief on the specified goods, enhancing their accessibility and potentially stimulating demand within the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0504720, made under the Customs Act 1901, applies to goods specifically identified in the application submitted to the Chief Executive Officer of Customs. This legislation facilitates the granting of Tariff Concession Orders (TCOs) for certain goods, allowing for a reduced or waived customs duty rate on those goods. The Act applies to the entities or individuals who import the specified goods and the Customs and Border Protection Service, which oversees the application and administration of TCOs. The instrument is applicable nationally, given the federal nature of the Customs Act 1901, which operates across the Commonwealth of Australia. Notably, the Act excludes certain goods from eligibility for a TCO, as outlined in section 269SJ of the Act. The process for determining the eligibility of goods for a TCO involves a review by the CEO to ensure that the goods do not have substitutable alternatives produced in Australia, as per the criteria in sections 269C, 269D, and 269E. The scope of the Act can be further extended or modified through subordinate instruments, as permitted by the Customs Act 1901.
Key Provisions
The key operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. Section 269C sets out the core criteria that must be met for an application to be considered valid, specifically that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) requires that if the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
Under this Act, the CEO of Customs is required to assess applications for TCOs and determine whether they meet the core criteria specified in section 269C. If the application meets the criteria, the CEO must issue a TCO. The CEO must also publish a notice in the Gazette inviting any interested parties to submit any objections to the TCO, as stipulated in subsection 269K(1). The TCO takes effect on the day the application was lodged, according to subsection 269S(1), and benefits importers by potentially entitling them to a refund of duty under paragraph 126(1)(r) of the Regulations for goods imported since the effective date.
In terms of offences and penalties, the Customs Act 1901 does not explicitly state penalties for breach of a TCO. However, breaches of other provisions in the Act can result in significant penalties. For example, under section 240 of the Act, a person who contravenes the Act or the regulations may be subject to a penalty of up to 10,000 penalty units or imprisonment for five years, or both, if the offence is committed by a body corporate. Other potential consequences of breach include financial penalties, confiscation of goods, and civil proceedings. It is important to note that while the Act does not specify penalties for breach of a TCO, the general penalties for contraventions of the Act apply broadly and could be invoked in the event of non-compliance with the terms of a TCO.