EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0515402
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.
Victor Sports Pty Ltd applied for a TCO in respect of certain Overlays on 4 November 2005.
Instrument
TCO No 0515402 was made on 16 January 2006. It declares that those certain Overlays 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 0%.
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. 0515402 is taken to have come into force on 4 November 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, introduced a scheme allowing for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on certain goods. This was introduced to address a gap in the tariff system by providing concessions on goods where no substitutable goods were produced in Australia in the ordinary course of business. The Tariff Concession Instrument No. 0515402, made on 16 January 2006, exemplifies this mechanism by declaring that certain Overlays are subject to a 0% duty rate, down from the general rate of 7.5%. The instrument was created following an application by Victor Sports Pty Ltd and after no objections were raised during the consultation period. The policy objective was to ensure that the rights of importers were positively affected, with the TCO not imposing any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0515402 under the Customs Act 1901 applies to entities or individuals who wish to seek a tariff concession on certain goods imported into Australia. The Act allows for the reduction or exemption of customs duty on specific goods, provided they meet the criteria outlined in section 269C of the Act, such as the absence of substitutable goods produced in Australia. The instrument is specifically concerned with Overlays for which Victor Sports Pty Ltd applied, and the application was processed by the Chief Executive Officer of Customs who, after determining that no substitutable goods were produced in Australia, made a written order reducing the duty rate from 7.5% to 0%. The TCO applies nationally across Australia and the decision to grant the concession was made based on the application submitted on 4 November 2005, with the concession being effective from that date. The application process includes public consultation as required by the Act, although in this case, no submissions were received. The instrument does not disadvantage any person except the Commonwealth and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901 (the Act) facilitates the creation of Tariff Concession Orders (TCOs) under section 269F, allowing for reduced customs duties on certain goods. A TCO can be applied for by any person, but the Chief Executive Officer of Customs (the CEO) must ensure the goods in question are not specified in section 269SJ, which lists goods ineligible for TCOs. The CEO's decision hinges on whether the goods meet the core criteria outlined in sections 269C and 269P(3) of the Act, specifically that no substitutable goods were produced in Australia in the ordinary course of business at the time of application.
Entities subject to the Act must ensure that any goods they wish to benefit from a TCO are not substitutable by Australian-made goods, and must apply to the CEO for a TCO if they meet the criteria. The CEO, upon satisfying the application meets the core criteria, must make a written order declaring the goods eligible for the concession. In this case, Victor Sports Pty Ltd successfully applied for a TCO for certain Overlays, resulting in Tariff Concession Order No. 0515402, which reduced the duty rate from 7.5% to 0% for these goods.
The Act also mandates that the CEO must invite submissions from the public when accepting a TCO application as valid, as per subsection 269K(1). This transparency measure ensures that any objections to the TCO can be considered before finalisation. In the case of TCO No. 0515402, no submissions were received in response to the published notice. Under subsection 269S(1), a TCO is effective from the day the application was lodged, in this instance, 4 November 2005. Importantly, the TCO does not affect the rights of any person, except the Commonwealth, in relation to actions taken before the TCO's effective date, and it does not impose any liabilities on individuals or entities.
Failure to comply with the requirements set out in the Act may result in legal consequences. While specific offences and penalties are not detailed in this particular excerpt, general provisions under the Customs Act and related regulations might include fines or other penalties for non-compliance with tariff laws. These penalties could vary depending on the severity of the breach and might be enforced through civil or criminal proceedings.