EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608181
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.
Dale Group International Pty Ltd applied for a TCO in respect of certain baby’s travel beds on 11 May 2006.
Instrument
TCO No 0608181 was made on 20 October 2006. It declares that those certain baby’s travel beds 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 7.5%. 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 Gro Corp Pty Ltd.
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. 0608181 is taken to have come into force on 11 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. 0608181 was enacted under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this case, certain baby's travel beds. The Act was amended to allow for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs (CEO) to reduce customs duty rates for goods that meet certain criteria, specifically where no substitutable goods are produced in Australia. This mechanism aims to support industries by providing cost advantages on imported goods, fostering competitiveness and potentially encouraging local production of such goods in the future. The instrument was introduced to provide a zero per cent duty rate on the specified baby's travel beds, down from the general rate of 7.5 per cent, effective from the date the application was lodged, 11 May 2006.
Scope and Application
The Tariff Concession Instrument No. 0608181 under the Customs Act 1901 applies to individuals and entities seeking tariff concessions on specific goods. This Act, specifically part XVA, outlines the conditions and criteria for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. The application process involves assessing whether the goods in question are eligible for a tariff concession based on the absence of substitutable goods produced in Australia. In this case, the instrument pertains to certain baby’s travel beds, which were found to have no substitutable goods produced domestically, thereby qualifying for the concession. The geographic scope of this legislation is national, with the tariff concessions applying across Australia. The TCOs do not retroactively affect the rights of any person, ensuring that they only benefit importers from the date of the application. Any objections to the TCO must be lodged within a specified period as per the Act’s requirements, with the TCO coming into effect on the day the application was lodged. This Act does not specify any exclusions or exemptions beyond those outlined in section 269SJ of the Customs Act, which prohibits certain goods from being subject to a TCO. The implementation and enforcement of this legislation may be extended or restricted through subordinate instruments, which provide further detail on the application process and eligibility criteria.
Key Provisions
The Tariff Concession Order No. 0608181 (TCO No. 0608181) under the Customs Act 1901 (the Act) grants a tariff concession for certain baby's travel beds. Section 269F of the Act allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods, and if certain criteria are met, the CEO must make a written order declaring that the goods in question are subject to the concession. Specifically, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. In this instance, the CEO was satisfied that the application for the baby's travel beds met these criteria, and accordingly, a TCO was issued (sections 269C, 269P(3)).
The obligations under this Act primarily involve the CEO ensuring that any application for a TCO is assessed against the criteria outlined in section 269C. This includes verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the making of a TCO (subsection 269K(1)). This ensures transparency and provides an opportunity for stakeholders to voice their concerns. Once the CEO is satisfied that the application meets the criteria, the TCO must be issued in writing.
Section 269S(1) of the Act specifies that a TCO is to be taken as coming into force on the day the application for the TCO was lodged. TCO No. 0608181 is therefore effective from 11 May 2006. This date sets the commencement of the concession, ensuring that the tariff concessions apply retroactively to imports that occurred from this date. However, it is important to note that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, so as to disadvantage that person or impose any liabilities in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)).
There are no explicit offences, penalties, or consequences for breach outlined in the legislation regarding the making of a TCO. However, any failure by the CEO to properly assess an application against the statutory criteria could potentially lead to legal challenges or disputes regarding the validity of the TCO. Importers and other stakeholders would have the right to seek judicial review if they believed the TCO was made in error or without proper consideration of the statutory criteria.