EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0509428
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.
Russ Australia Pty Limited applied for a TCO in respect of fridge magnets on 5 July 2005.
Instrument
TCO No 0509428 was made on 23 September 2005. It declares that the certain fridge magnets 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. 0509428 is taken to have come into force on 5 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 Tariff Concession Instrument No. 0509428, enacted in 2005, is a regulation under the Customs Act 1901, designed to facilitate tariff concessions for certain goods by reducing or eliminating customs duty rates. The Customs Act 1901, managed by the Parliament of Australia, provides a framework for tariff concessions, allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply reduced duty rates to specified goods, provided certain criteria are met. The policy objective of this instrument is to provide tariff relief to encourage the importation of goods that are not produced domestically, thereby supporting trade and potentially lowering consumer prices.
The Tariff Concession Instrument No. 0509428 specifically addresses the application by Russ Australia Pty Limited for tariff concessions on fridge magnets, which were deemed eligible for a concession as no substitutable goods were produced in Australia at the time of application. The instrument declares that certain fridge magnets are subject to a duty rate of free, down from the general rate of 5%. The regulation was published in the Gazette, inviting public submissions, none of which were received. The concession is effective from the date the application was lodged, 5 July 2005, and it ensures that rights and liabilities of parties other than the Commonwealth are not adversely affected. Importers of the affected goods can apply for duty refunds for imports made since the effective date.
Scope and Application
The Customs Act 1901 applies to the regulation of imports and exports through customs duty and includes provisions for the granting of Tariff Concession Orders (TCOs). These concessions apply to specific goods that are subject to the application and subsequent approval by the Chief Executive Officer of Customs. The Act specifically excludes certain goods from eligibility for a TCO, as outlined in section 269SJ, which includes goods that are either harmful, environmentally sensitive, or those that could undermine local production. A TCO is applicable to a particular set of goods upon the application being lodged and is retroactive to the date of application, provided no substitutable goods were produced in Australia at that time. The process of application and concession involves public consultation and must adhere to the guidelines and criteria set out in the Act. The scope of the Act extends to the entire Commonwealth of Australia, ensuring a uniform approach to customs duty and tariff concessions across all states and territories. Any subordinate instruments or regulations would further detail the specific processes and criteria for TCOs but would not alter the fundamental principles and application outlined in the Customs Act 1901.
Key Provisions
The key operative sections of this legislation include sections 269C, 269B, 269D, 269E, 269P(3), 269K(1), and 269S(1) of the Customs Act 1901. Section 269C specifies that an application for a Tariff Concession Order (TCO) meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions if the application is accepted as valid, and section 269S(1) states that a TCO is effective from the day the application was lodged.
The Customs Act imposes several obligations on the CEO, including the requirement to assess whether a TCO application meets the core criteria as defined in section 269C. This involves determining whether substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged, according to definitions provided in sections 269B, 269D, and 269E. If the CEO is satisfied that the application meets the criteria, they must make a TCO and publish a notice in the Gazette, inviting any person to submit reasons why the TCO should not be made, as per section 269K(1). The CEO must also ensure that the TCO does not adversely affect the rights of persons other than the Commonwealth and does not impose liabilities on such persons before the date of registration.
The Customs Act does not explicitly state any offences, penalties, or consequences for breach of the TCO provisions. However, it is implicit that failure to comply with the obligations imposed by the Act could lead to legal challenges or administrative consequences. For instance, if the CEO fails to follow the prescribed process for assessing and approving a TCO application, the order could be contested in court. Additionally, if the TCO imposes unintended liabilities or disadvantages on persons other than the Commonwealth, it could lead to legal disputes and potential remedies. While the Act does not specify maximum penalties for non-compliance, breaches could result in judicial review or other legal actions to rectify the situation.