EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505972
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.
Gray-Nicolls Sports Pty Ltd applied for a TCO in respect of certain sports bags on 20 May 2005.
Instrument
TCO No 0505972 was made on 07 October 2005. It declares that those certain sports bags 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. 0505972 is taken to have come into force on 20 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. 0505972, enacted in 2005, was introduced to address a specific need under the Customs Act 1901 for tariff concessions on certain goods. This legislation was enacted by the Australian Parliament and aims to provide relief in the form of reduced customs duties on particular goods that meet certain criteria, thereby encouraging trade and economic activity. In this instance, the instrument was made in response to an application from Gray-Nicolls Sports Pty Ltd for tariff concessions on certain sports bags. The Customs Act 1901 allows for the Chief Executive Officer of Customs to grant such concessions if certain conditions are met, including the absence of substitutable goods being produced in Australia. Instrument TCO No. 0505972 was subsequently issued, declaring that the specified sports bags would be subject to a zero rate of customs duty instead of the general rate of 5%, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0505972, established under Part XVA of the Customs Act 1901, applies to individuals or entities that seek to have a lower rate of customs duty applied to imported goods, provided that such goods are not specified as ineligible under section 269SJ of the Act. The process involves an application to the Chief Executive Officer of Customs (CEO), who must determine if the application meets the core criteria, specifically that no substitutable goods are produced in Australia in the ordinary course of business as of the day the application was lodged. This instrument facilitates tariff concessions, granting tariff relief for certain goods and ensuring that the CEO’s decision to issue a Tariff Concession Order (TCO) does not disadvantage any person or impose liabilities on anyone except the Commonwealth. The instrument's geographic reach is national, applying throughout Australia, and it does not extend its application through subordinate instruments beyond its stated provisions.
Key Provisions
The Tariff Concession Order No. 0505972, as set out in the Customs Act 1901 (section 269F), provides specific provisions for tariff concessions on certain goods. This order applies to sports bags which, under the normal customs tariff, would attract a duty rate of 5%. However, under the terms of the TCO, these sports bags are exempt from customs duty, effectively reducing the duty rate to free. This means that importers of these sports bags are not required to pay the usual customs duty on these goods. This concession is contingent upon the Chief Executive Officer (CEO) of Customs being satisfied that the application for the concession meets the core criteria outlined in section 269C of the Act, and that no substitutable goods are produced in Australia (section 269D and 269E).
The obligations under this Act for parties such as Gray-Nicolls Sports Pty Ltd, who applied for the concession, include ensuring that the application meets the specified criteria, particularly that no substitutable goods are being produced in Australia. The CEO has an obligation to review the application and make a decision based on the information provided and any submissions received (section 269K(1)). If the CEO decides to grant the concession, they must issue a written order specifying the concession details, such as the item number in the Customs Tariff Act 1995 (Schedule 4, item 50) to which the concession applies.
Failure to comply with the requirements of the Customs Act 1901 or any associated regulations could lead to various consequences. If an entity falsely claims that no substitutable goods are produced in Australia, they could be subject to penalties under the Act. The specific penalties for breaches are not detailed in the explanatory statement but could include fines or other legal actions under the relevant sections of the Act. The Act also provides for the possibility of civil or criminal proceedings for more severe breaches, with the potential for significant penalties, though exact figures are not specified in the provided text.