EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516805
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.
Trinity Distribution applied for a TCO in respect of certain skateboard decks on 14 December 2005.
Instrument
TCO No 0516805 was made on 10 March 2006. It declares that those certain skateboard decks 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. 0516805 is taken to have come into force on 14 December 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. 0516805 was enacted in 2006 under the authority of the Customs Act 1901 to address the need for tariff concessions on specific imported goods that were not being produced domestically. This legislation allows the Chief Executive Officer of Customs to apply lower rates of customs duty on imported goods that meet certain criteria, specifically where no substitutable goods are produced in Australia. This was in response to an application from Trinity Distribution for tariff concessions on certain skateboard decks, where it was determined that no domestic equivalent was being produced, thus qualifying for the tariff concession. The Tariff Concession Order was published in the Gazette with an invitation for submissions, but none were received. The order came into effect on the date the application was lodged, 14 December 2005, and benefits importers by allowing them to apply for duty refunds on goods imported since that date, without imposing any new liabilities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to goods specified in the application, provided they meet the core criteria set out in the Act, and result in a lower rate of customs duty. The application process mandates that the CEO must ensure no substitutable goods are produced in Australia in the ordinary course of business on the date the application is lodged. This provision ensures that the concession is granted to promote the importation of goods that are not domestically produced, thereby benefiting importers by potentially reducing their duty costs. The instrument, TCO No. 0516805, applies to specific skateboard decks, effectively granting them a zero percent duty rate. The instrument is designed to come into force on the date the application was lodged, which in this case is 14 December 2005. The TCO does not retroactively disadvantage any person or impose liabilities for actions taken prior to its registration, and it allows importers to seek duty refunds for goods imported since the effective date of the TCO.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0516805 are sections 269C, 269P, and 269S (subparagraphs 1 and 2). Section 269C of the Customs Act 1901 (the Act) outlines the core criteria for a Tariff Concession Order (TCO) application to be valid, which includes the requirement that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). Section 269P mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application meets these criteria, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Section 269S(1) specifies that a TCO is to be taken as coming into force on the day the application for the TCO was lodged.
The Act imposes several obligations and requirements on the parties involved. Firstly, section 269K(1) requires the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to lodge a submission. Additionally, the Act mandates that the CEO must ensure that a TCO does not disadvantage any person (other than the Commonwealth) or impose liabilities on them in respect of actions taken before the date of registration (section 269S(2)). The CEO must also confirm that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged before making a TCO (section 269C).
The Act outlines various consequences for breaches. Under the Customs Act 1901, breaches of the provisions related to the TCO process could result in civil or criminal penalties. However, the specific penalties for breach of the TCO process are not detailed in the provided text. The general implication is that failure to adhere to the requirements set out in the Act could lead to legal repercussions, including fines or other penalties as prescribed by the relevant legislation. The exact penalties would be determined based on the nature and severity of the breach, in accordance with applicable laws and regulations.