EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606197
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.
Independence Studios Pty Ltd applied for a TCO in respect of certain imitation jewellery on 3 April 2006.
Instrument
TCO No 0606197 was made on 25 June 2006. It declares that those certain imitation jewellery 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. 0606197 is taken to have come into force on 3 April 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, enacted by the Parliament of Australia, includes provisions that enable the application for Tariff Concession Orders (TCOs) to adjust customs duty rates on certain goods. This legislation aims to address economic inefficiencies and support competitiveness by allowing lower customs duty rates for imported goods when no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 0606197, issued on 25 June 2006, is an example of such a concession, applied to certain imitation jewellery by Independence Studios Pty Ltd. The policy objective here is to provide tariff relief and thereby enhance the competitive position of Australian businesses while ensuring that the rights of importers are protected and not disadvantaged by such concessions. The TCO ensures that the rights of importers are not adversely affected and may even benefit from duty refunds on imports made since the concession came into effect.
Scope and Application
The Customs Act 1901, through its Part XVA, authorises the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that reduce the customs duty on specified goods. This mechanism applies to any person who can demonstrate that the goods for which the concession is sought are not substitutable by any goods produced in Australia in the ordinary course of business, as defined in the Act. The instrument in question, TCO No. 0606197, was issued on 25 June 2006, following an application by Independence Studios Pty Ltd for tariff concessions on certain imitation jewellery. The TCO applies a zero percent duty rate to these goods, which would otherwise attract a general duty rate of 5%. The Act ensures that the TCO does not adversely affect any rights or impose liabilities on third parties as of the date of registration, while benefiting importers who may apply for duty refunds on goods imported since the effective date of the TCO, which is the date the application was lodged. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia, and the Act allows for further elaboration or restriction of its application through subordinate instruments.
Key Provisions
The Tariff Concession Instrument No. 0606197, issued under the Customs Act 1901, establishes a tariff concession order (TCO) for certain imitation jewellery. According to section 269F, an application for a TCO can be submitted to the Chief Executive Officer of Customs (CEO), provided the goods in question are not prohibited by section 269SJ. The CEO must ensure that the application meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the date the application was lodged. Substitutable goods, as defined in section 269D and section 269E, are those produced in Australia that can be used in a manner similar to the goods in question. Once these criteria are met, the CEO is obligated to issue a written order under section 269P(3), declaring that the specified goods are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995, which in this case is item 50.
Entities governed by the Act, such as applicants for TCOs and the CEO, must adhere to several obligations. The applicant must submit a valid TCO application that meets the core criteria set out in section 269C. The CEO is required to review the application, determine if it meets the criteria, and if so, issue a TCO. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections. In this case, no submissions were received. Once a TCO is issued, it comes into effect on the date the application was lodged, as specified in section 269S(1). The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
There are no specific offences or penalties outlined in the Act for breaches related to the issuance of a TCO. However, general compliance with the Customs Act 1901 is essential, and failure to adhere to its provisions could result in various civil or criminal penalties. For instance, knowingly making a false statement in an application could lead to fines or imprisonment as per the general provisions of the Act. Additionally, any failure to comply with the terms of the TCO could result in the imposition of duties at the standard rate or other penalties as prescribed under the Customs Act.