EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512198
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 shoes on 16 September 2005.
Instrument
TCO No 0512198 was made on 25 November 2005. It declares that those certain cricket shoes 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 10%. 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. 0512198 is taken to have come into force on 16 September 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. 0512198 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions for specific goods not produced in Australia, thereby encouraging imports and ensuring market availability. The instrument was issued by the Chief Executive Officer of Customs in response to an application by Gray-Nicolls Sports Pty Ltd for tariff concessions on certain cricket shoes. The instrument was introduced to provide tariff concessions where no substitutable goods are produced in Australia, thus ensuring that the application meets the core criteria stipulated in the Customs Act 1901. The policy objective of this instrument is to facilitate the import of goods that are not domestically produced, thereby providing benefits to importers and ultimately consumers, without imposing any liabilities or disadvantaging other persons.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0512198, pertains to the application and issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative framework applies to individuals or entities seeking tariff concessions on specific goods imported into Australia, provided these goods meet certain criteria outlined in the Act. The TCO process is particularly relevant for industries involved in the import of goods that are not produced domestically or where domestic alternatives do not exist. The scope of this legislation extends across Australia, impacting all importers who may benefit from the reduced customs duty rates as specified in the TCO. However, the Act excludes goods specified in section 269SJ, which are ineligible for tariff concessions. The TCO is effective from the date the application is lodged, as per section 269S(1) of the Act, and in this case, the TCO is considered to have come into force on 16 September 2005. The instrument also ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of the TCO, nor does it impose any liabilities on any individual or entity.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to provide lower rates of customs duty on certain goods (s 269F). To qualify for a TCO, an applicant must ensure that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (s 269C). If the CEO is satisfied that the application meets these core criteria, they are required to make a written order (s 269P(3)). For instance, in the case of Gray-Nicolls Sports Pty Ltd, the CEO made TCO No. 0512198 on 25 November 2005, declaring that certain cricket shoes, subject to the application, are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a tariff concession from a general rate of 10% to free.
The Act imposes several obligations on the CEO, including the requirement to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (s 269K(1)). This notice must invite any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In this case, no submissions were received in response to the published notice. Additionally, a TCO is considered to come into force on the day on which the application for the TCO was lodged (s 269S(1)). Therefore, TCO No. 0512198 is deemed to have come into force on 16 September 2005. Importantly, a TCO does not affect the rights of any person, other than the Commonwealth, in a way that would disadvantage that person or impose liabilities in respect of actions taken or omitted before the date of registration (s 269S(2)).
Under the Act, the rights of importers will be beneficially affected by the TCO. Specifically, importers of the goods subject to the TCO can apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force (Reg 126(1)(r)). Importantly, the TCO does not impose any liabilities on any person, ensuring that no one is adversely affected by the concession granted to the specified goods.
The Act does not explicitly detail the offences, penalties, or consequences for breaching the provisions related to TCOs. However, it is implied that any misuse or improper application of the concession would be subject to the general enforcement mechanisms under the Customs Act and related legislation, which could include civil or criminal penalties as applicable under the broader legislative framework. For specific penalties, one would need to refer to the broader Customs Act and associated regulations.