EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607962
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.
KBT Australia Pty Ltd applied for a TCO in respect of certain playground construction kits on 04 May 2006.
Instrument
TCO No 0607962 was made on 28 July 2006. It declares that those certain playground construction kits 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. 0607962 is taken to have come into force on 04 May 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. 0607962, made under the Customs Act 1901, aims to address the need for reducing customs duties on specific imported goods when no suitable Australian-made alternatives are available. Enacted in 2006, this instrument facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, thereby allowing a lower rate of customs duty for goods specified in such orders. The primary legislative objective is to provide a streamlined process for businesses to apply for tariff concessions, ensuring that the application process is transparent and includes opportunities for public input. The policy objective is to support the importation of goods that are not produced domestically, thereby benefiting consumers and businesses by potentially reducing costs and increasing access to a broader range of products.
Scope and Application
The Customs Act 1901, under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. This legislation applies to any person or entity seeking a tariff concession for goods not specified in section 269SJ of the Act, which lists goods ineligible for a TCO. The scope of the Act is national, applying throughout Australia, and its application is not limited to specific industries or transactions but rather to the general importation of goods. The Act mandates that for a TCO to be granted, the CEO must be satisfied that the goods in question are not substitutable by Australian-produced goods and are used in the ordinary course of business. Exclusions from this Act include goods specified in section 269SJ, which cannot be subject to a TCO. The CEO’s decision-making process is further governed by the need to publish notices in the Gazette and consider any submissions received from interested parties, although in this particular instance, no submissions were lodged. The application of the Act can be extended or restricted through subordinate instruments, which can provide additional clarity or conditions on the issuance of TCOs.
Key Provisions
The Customs Act 1901, as amended, includes provisions for Tariff Concession Orders (TCOs) under Part XVA. A TCO allows for a lower rate of customs duty on certain goods, as specified in the order. Section 269F permits a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. For the application to be considered, it must not relate to goods specified in section 269SJ, which lists those goods ineligible for a TCO. The CEO must assess whether the application meets the core criteria outlined in section 269C. This involves determining whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed on parties under this legislation require applicants to ensure their submissions comply with the specified criteria, such as those detailed in sections 269D, 269E, and 269F. The CEO has a duty to review the application against these criteria and, if satisfied, must make a written TCO, as mandated by section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted. In this particular case, no submissions were received, leading to the approval of the TCO.
There are no specific offences or penalties outlined in the Act related to the failure to comply with the TCO process itself. However, any misuse or fraudulent claims related to the concessions granted by a TCO could potentially lead to civil or criminal penalties under other sections of the Customs Act 1901 or related legislation. For instance, providing false information in the application process could attract penalties under section 238 of the Act, which deals with false statements or documents. Such offences could result in substantial fines or imprisonment, depending on the severity of the offence.