EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602901
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.
Sea to Summit Pty Ltd applied for a TCO in respect of certain sacks on 24 January 2006.
Instrument
TCO No 0602901 was made on 9 May 2006. It declares that those certain sacks 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 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. One submission objecting to the TCO application was received from Adventure One Pty Ltd.
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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. 0602901 is taken to have come into force on 24 January 2006.
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. 0602901 was enacted in 2006 under the Customs Act 1901 to provide relief on customs duty for specific goods. This legislation was introduced to address the need for tariff concessions for goods where no substitutable Australian-produced alternatives exist, thereby encouraging trade and potentially benefiting importers by reducing their duty liabilities. The instrument was made by the Chief Executive Officer of Customs, following an application by Sea to Summit Pty Ltd for a tariff concession on certain sacks. The process involved consultation with the public, including consideration of a submission from Adventure One Pty Ltd, and the tariff concession was granted as no substitutable goods were produced in Australia at the time of the application. The instrument aims to align with the policy objective of the Customs Act by facilitating trade and ensuring that the application of tariff concessions does not disadvantage any party or impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0602901 under the Customs Act 1901 applies specifically to the concession of customs duty for certain sacks as requested by Sea to Summit Pty Ltd. The instrument is effective from the date of the application, 24 January 2006, and it applies to the goods specified in the application once the Chief Executive Officer of Customs is satisfied that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The instrument establishes a zero percent duty rate for these specific goods, reducing it from the general rate of five percent. This instrument operates within the broader framework of the Customs Act 1901, which is a Commonwealth Act, thereby extending its reach across the entire nation. The instrument is subject to the exclusions and criteria outlined in sections 269SJ and 269C of the Act, which define the types of goods that cannot be subject to a TCO and the conditions under which the core criteria must be met. The instrument may be further refined or extended through subordinate instruments as necessary to align with the Act's provisions.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Instrument No. 0602901, are sections 269C, 269B, 269D, 269E, 269P(3), and 269SJ of the Customs Act 1901. Section 269C requires that a Tariff Concession Order (TCO) application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Sections 269B and 269D provide definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are crucial in determining eligibility for a TCO. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets the core criteria, they must make a written order (TCO). Section 269SJ specifies goods that cannot be subject to a TCO.
The Customs Act 1901 imposes certain obligations and requirements on parties applying for a TCO. An applicant, such as Sea to Summit Pty Ltd in this case, must ensure their application is valid and meets the core criteria as outlined in section 269C. The CEO must then assess whether the application meets these criteria and verify that no substitutable goods were produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting objections to the TCO application, as required by subsection 269K(1). In this instance, one submission objecting to the TCO application was received from Adventure One Pty Ltd.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal consequences. The Act does not specify particular offences or penalties for breaches related to TCOs, but general provisions of the Customs Act may apply. These could include fines or imprisonment for wilful or negligent breaches of customs regulations. The severity of penalties would depend on the nature and extent of the breach, as determined by the courts.
In this particular case, the Tariff Concession Instrument No. 0602901 was made on 9 May 2006, declaring that certain sacks are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, with a reduced rate of duty from 5% to 0%. This concession is effective from 24 January 2006, the date the application was lodged, and it does not impose any liabilities on any person other than the Commonwealth. Importers of these goods will benefit from this concession and may apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.