EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508907
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.
Dale Importers (Australia) Pty Ltd applied for a TCO in respect of certain nursing cushions on 11 July 2005.
Instrument
TCO No 0508907 was made on 07 October 2005. It declares that those certain nursing cushions 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 7.5%. 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. 0508907 is taken to have come into force on 11 July 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, enacted by the Australian Parliament, includes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. The purpose of this scheme is to provide relief from customs duties for certain imported goods, provided they meet specified criteria. The Concession Instrument No. 0508907, which came into effect on 11 July 2005, was introduced to address the need for reduced customs duty rates for certain nursing cushions. Dale Importers (Australia) Pty Ltd applied for this concession, and after the CEO of Customs was satisfied that no substitutable goods were produced in Australia, the application was approved. The general duty rate of 7.5% was reduced to free, benefiting importers who can now apply for a refund of duty for goods imported since the TCO's effective date. The policy objective is to facilitate trade by reducing the cost of importing specific goods, thereby encouraging their availability in the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals and entities that wish to apply for tariff concessions on imported goods, ensuring that no substitutable goods are produced in Australia. The TCOs affect the rate of customs duty applicable to specific goods, with the geographic scope of this legislation being national, as it pertains to the entire Commonwealth of Australia. Notably, certain goods are excluded from TCOs as specified in section 269SJ of the Act. The Act allows for the expansion or restriction of its application through subordinate instruments, which would be created and managed under the authority of the Customs Act 1901. The process includes public consultation where the CEO invites submissions from interested parties following the acceptance of a TCO application as valid. This mechanism ensures transparency and allows stakeholders to provide input on proposed tariff concessions.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied through Tariff Concession Order No. 0508907, involve sections 269C, 269F, 269P, and 269S. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO determines that the application meets the core criteria, including the absence of substitutable goods produced in Australia, they must issue a TCO, as per section 269P(3). This order, as evidenced by TCO No. 0508907, declares the goods to which a prescribed tariff item applies, thereby granting a concession on the customs duty applicable to those goods.
The Act imposes several obligations on the parties involved. The CEO is required to assess the validity of a TCO application under section 269F and determine whether it meets the core criteria outlined in section 269C. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons the TCO should not be made. The CEO is also required to consider these submissions, although in this case, no submissions were received. For the applicant, the obligation lies in providing a valid application that meets the statutory criteria and in responding to any requests for further information or clarification from the CEO.
The Act provides for potential consequences for non-compliance with its provisions. While the explanatory statement does not detail specific offences related to TCO applications, breaches of the Customs Act 1901 generally may result in penalties. Under the Customs Act, contraventions can lead to civil penalties, including fines, and in some cases, criminal penalties, including imprisonment. However, the explanatory statement does not specify maximum penalties for breaches directly related to TCO applications. It is important to note that while the TCO does not impose new liabilities on persons other than the Commonwealth, failure to comply with the terms of the TCO or other provisions of the Customs Act may still result in penalties under the relevant sections of the Act.