EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505170
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.
Kra-Mar Pet Supplies Pty Ltd applied for a TCO in respect of certain Dog Bark Control Collars on 5 May 2005.
Instrument
TCO No 0505170 was made on 16 September 2005. It declares that those certain Dog Bark Control Collars 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 0%.
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. 0505170 is taken to have come into force on 5 May 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 Tariff Concession Instrument No. 0505170, enacted in 2005, addresses the need to provide tariff concessions on specific goods by amending the Customs Act 1901. This legislative instrument was introduced to facilitate the granting of tariff concessions for goods where no substitutable goods are produced in Australia, thereby allowing for a lower rate of customs duty on these goods. The instrument was enacted by the Chief Executive Officer of Customs, in line with the provisions set out in the Customs Act 1901, and aims to ensure that the application process for tariff concessions is transparent and accessible while considering the economic benefits for importers. The policy objective is to support industries by reducing the cost of imported goods, thus promoting competitiveness and efficiency.
Scope and Application
The Tariff Concession Instrument No. 0505170, issued under Part XVA of the Customs Act 1901, applies to any entity seeking a Tariff Concession Order (TCO) for goods that are not being produced in Australia and for which a lower rate of customs duty can be applied. The primary focus of this legislation is to facilitate applications for TCOs by businesses or individuals aiming to import specific goods without incurring the standard customs duty, provided these goods are not already being produced domestically. The scope of this legislation encompasses the approval process by the Chief Executive Officer of Customs, who evaluates applications to ensure they meet the criteria for a TCO, notably that no substitutable goods are produced in Australia. The geographic reach of this Act is national, as it pertains to the regulation of imports across Australia under the authority of the Commonwealth. The application of this Act may be extended or modified through subordinate instruments, such as regulations or further orders made under the Customs Act. Notably, the Act excludes certain goods as specified in section 269SJ from being eligible for a TCO.
Key Provisions
The key provisions of the Customs Act 1901, as referenced in the Tariff Concession Instrument No. 0505170, revolve around the process and criteria for establishing Tariff Concession Orders (TCOs) (sections 269C, 269F, 269K, 269P, 269S). The Act allows for a lower rate of customs duty on goods specified in a TCO if certain criteria are met. An applicant can apply for a TCO if the goods in question are not specified in section 269SJ of the Act (section 269F). The Chief Executive Officer of Customs (CEO) is responsible for determining whether the application meets the core criteria, which include ensuring that no substitutable goods are produced in Australia at the time the application is lodged (section 269C). If the CEO determines that the application meets these criteria, they must issue a TCO, specifying the applicable duty rate (section 269P(3)).
The obligations imposed by the Act on parties include the requirement for the CEO to assess TCO applications against the criteria specified in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might object to the making of a TCO (section 269K(1)). Additionally, the CEO is mandated to ensure that the TCO does not adversely affect the rights of any person or impose liabilities on them for actions taken prior to the TCO's registration date (section 269S(1)).
Breach of the provisions outlined in the Customs Act 1901 may result in various consequences. For instance, if a person knowingly provides false or misleading information in an application for a TCO, they may be subject to criminal penalties. Under section 275 of the Act, such an offence carries a maximum penalty of 12 months imprisonment or a fine of 10,000 penalty units, or both. Furthermore, the Act stipulates that the rights of importers will be beneficially affected, with importers being able to apply for a refund of duty on goods imported since the TCO is taken to have come into force (Regulation 126(1)(r)). The Act ensures that no liabilities are imposed on any person as a result of the TCO.