EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0506114
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 cricket stumps on 23 May 2005.
Instrument
TCO No 0506114 was made on 07 October 2005. It declares that those certain cricket stumps 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. 0506114 is taken to have come into force on 23 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. 0506114 was enacted in 2005 under the Customs Act 1901, with the aim of facilitating tariff concessions for specific goods not produced in Australia. The Customs Act 1901, administered by the Parliament of Australia, provides a framework for tariff concession orders (TCOs) to be issued by the Chief Executive Officer of Customs, reducing customs duty on qualifying imported goods. In this instance, the instrument addresses the issue of imported cricket stumps, granting a concession to Gray-Nicolls Sports Pty Ltd by exempting certain cricket stumps from the usual 5% duty rate, making it free. The instrument was introduced following an application by Gray-Nicolls Sports Pty Ltd, and the Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. The policy objective aligns with promoting fair trade practices and supporting Australian industries by ensuring that imported goods do not undermine local production.
Scope and Application
The Tariff Concession Instrument No. 0506114, made under section 269F of the Customs Act 1901, applies specifically to the goods identified in the application submitted by Gray-Nicolls Sports Pty Ltd, namely certain cricket stumps. The Act provides a framework through which the Chief Executive Officer of Customs may grant tariff concessions on goods, reducing the rate of customs duty applied to them. This instrument is applicable to any entity or person importing the specified cricket stumps into Australia, thereby directly impacting importers who benefit from the reduced duty rate. Geographically, the application of this instrument is limited to Australia, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The instrument does not affect the rights of any person, except to beneficially impact the rights of importers by allowing them to claim a refund of duty on goods imported since the effective date of the instrument. Importantly, it does not impose any liabilities on any person. The instrument also extends its application through subordinate instruments, as outlined in the Regulations, which provide further details on the administration and effect of the tariff concession.
Key Provisions
The primary operative sections of this legislation pertain to the creation and operation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F (1) allows for the application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application is valid and not in respect of goods specified in section 269SJ, which outlines those goods ineligible for a TCO, the CEO must then decide if the application meets the core criteria set out in section 269C. This section stipulates that the application meets the criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Once these criteria are satisfied, the CEO is required to issue a written order under section 269P(3) that specifies the application of a prescribed item of Schedule 4 to the Customs Tariff Act 1995 to the goods in question.
The Act imposes specific obligations on the parties involved in the TCO process. The CEO must, upon receiving a valid application, publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made, as outlined in subsection 269K(1). In this instance, no submissions were received. Moreover, the TCO must be made in such a way that it does not disadvantage any person or impose liabilities on any person in respect of actions taken before the TCO was registered, as per subsection 269S(1). The TCO's commencement date is taken to be the day the application was lodged, which in this case is 23 May 2005.
In terms of potential consequences for non-compliance, the Act does not explicitly outline specific offences or penalties for breaching the provisions related to TCOs. However, general provisions within the Customs Act 1901 would apply for any breaches of its terms. These could potentially include fines or other penalties as determined by the courts, although the maximum penalties are not specified within this particular instrument. Importers, however, can benefit by applying for a refund of duty on goods imported since the day the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.