EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0602906
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 trekking poles on 24 January 2006.
Instrument
TCO No 0602906 was made on 7 April 2006. It declares that those certain trekking poles 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. 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. 0602906 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 Customs Act 1901 was enacted by the Australian Parliament to regulate the import and export of goods into and out of Australia. The Act establishes a framework for the administration of customs duties and provides the basis for the creation of Tariff Concession Orders (TCOs) to offer relief from certain customs duties. The introduction of the Customs Tariff Concession Instrument No. 0602906 in 2006 was aimed at addressing specific trade-related issues by providing tariff concessions on certain goods, in this case, trekking poles, which had a zero percent duty rate as opposed to the general rate of 5 percent. This instrument was made under the authority of the Customs Act 1901, allowing the Chief Executive Officer of Customs to grant tariff concessions when specific criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective of this measure is to support Australian industries by facilitating the importation of goods that are not locally produced, thereby promoting competitive markets and consumer choice.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders allow for a reduced rate of customs duty on specific goods, provided an application is made and the relevant criteria are met. The Act applies to any person or entity seeking a tariff concession for goods, contingent on the absence of substitutable goods produced in Australia at the time of the application. This concession scheme operates under the national jurisdiction of the Commonwealth and affects the rights and obligations of importers and other stakeholders involved in the importation of goods. Notably, the Act does not apply to goods specified in section 269SJ, which outlines those that cannot be subject to a TCO. The geographic reach of this legislation is national, with its provisions extending across Australia. The application of the Act can be further detailed or refined through subordinate instruments, which may include regulations and orders made under the authority of the Act.
Key Provisions
The Tariff Concession Instrument No. 0602906 under the Customs Act 1901 is designed to lower the customs duty on certain goods through the issuance of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO) (s. 269F). For Sea to Summit Pty Ltd, this means that their application for a TCO on certain trekking poles was accepted, and the CEO issued TCO No. 0602906 on 7 April 2006, declaring that these trekking poles are subject to a 0% customs duty rate as opposed to the usual 5% (s. 269P(3)). This order was made after the CEO confirmed that no substitutable goods were being produced in Australia on the date of the application (s. 269C).
The obligations imposed by the Customs Act 1901 on the parties involved are quite specific. For instance, the CEO has a duty to assess applications for TCOs to ensure they meet the core criteria and are not for goods listed in section 269SJ, which cannot be subject to a TCO (s. 269F). Once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting any interested party to lodge submissions if they believe the TCO should not be issued (s. 269K(1)). In this case, no submissions were received in response to the published notice. Additionally, the Act ensures that the rights of any person other than the Commonwealth are not adversely affected by the TCO as of the date of registration (s. 269S(1)). Importers, however, can benefit from applying for a refund of duties paid on goods imported since the TCO was taken to have come into force (Reg. 126(1)(r)).
In terms of penalties and consequences, the Customs Act 1901 does not specify particular offences directly related to the issuance or application of TCOs. However, general provisions under the Act could apply to breaches of other customs regulations. For example, penalties for contravening the Customs Act could include fines or imprisonment, depending on the severity of the offence. The exact penalties would be determined in accordance with the applicable laws and could vary significantly. Therefore, while the primary focus of the TCO is to reduce customs duty on specified goods, adherence to the broader obligations and regulations under the Customs Act is crucial to avoid any potential legal repercussions.