EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610621
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.
Cher International Pty Ltd applied for a TCO in respect of certain travel sets on 20 June 2006.
Instrument
TCO No 0610621 was made on 15 September 2006. It declares that those certain travel sets 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. 0610621 is taken to have come into force on 20 June 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. 0610621, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods, in this instance, certain travel sets, thereby reducing the customs duty on these items. The Instrument was introduced to facilitate the application process for tariff concessions as outlined in Part XVA of the Customs Act, aiming to lower the duty on goods not produced in Australia and for which no substitutable goods exist domestically. This initiative was enacted by the Chief Executive Officer of Customs (CEO) in response to an application by Cher International Pty Ltd on 20 June 2006. The CEO subsequently determined that the application met the core criteria, as no substitutable goods were produced in Australia, leading to the issuance of the Instrument on 15 September 2006. The policy objective here is to streamline the application process for tariff concessions, ensuring that the rights of importers are not adversely affected while potentially benefiting from duty refunds on goods imported since the Instrument's effective date.
Scope and Application
The Tariff Concession Instrument No. 0610621 applies to the Customs Act 1901, specifically addressing the process for applying and granting Tariff Concession Orders (TCOs) for certain goods, thereby providing a lower rate of customs duty for those goods. The application of this legislation is pertinent to individuals or entities seeking to import goods that qualify for a reduced tariff under the Customs Act. This Act applies on a Commonwealth level, governed by the Chief Executive Officer of Customs who must evaluate applications to determine if they meet the core criteria, which includes ensuring that no substitutable goods are produced in Australia. The scope of the legislation extends to any goods specified in an application for a TCO, excluding those goods listed in section 269SJ of the Customs Act, which are ineligible for tariff concessions. The commencement date of the TCO is the date on which the application was lodged, as per the Act, and the TCO does not retroactively disadvantage any person or impose new liabilities. The TCO applies nationally within Australia, affecting the rights of importers who can seek a refund of duty for goods imported since the effective date of the TCO. The legislation can be extended or restricted through subordinate instruments, ensuring flexibility in its application across various contexts.
Key Provisions
The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) through Part XVA. Section 269F provides a mechanism for individuals or entities to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of particular goods. The CEO must assess whether the application meets the core criteria outlined in section 269C, which requires that no substitutable goods are being produced in Australia on the day the application is lodged. Further definitions for "goods produced in Australia", "ordinary course of business", and "substitutable goods" are provided in sections 269D, 269E, and 269B respectively. If the CEO determines that the application meets these criteria, they must issue a written order, as stipulated in section 269P(3), that declares the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995, effectively granting them a lower rate of customs duty.
Entities and individuals subject to this legislation have specific obligations. They must ensure that any application for a TCO is valid and meets the core criteria, particularly that no substitutable goods are produced in Australia. Additionally, once an application is accepted as valid, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who may have reasons to oppose the TCO, as outlined in subsection 269K(1). The CEO must consider any submissions received before making a final decision. The TCO itself does not affect existing rights or impose liabilities on anyone for actions taken prior to its registration, though it does provide benefits such as the ability to apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.
In terms of consequences for non-compliance or breaches, the explanatory statement does not provide explicit details on offences or penalties. However, given the nature of the Act and the legal framework, any failure to comply with the requirements for applying for a TCO or any misuse of the concession granted could potentially lead to legal action, fines, or other penalties as prescribed under the broader Customs Act 1901 and associated regulations. The specifics of these penalties would depend on the nature of the breach and the applicable laws at the time of the offence.