EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615592
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.
Animal Behaviour Systems (Australia) Pty Ltd applied for a TCO in respect of certain bark control dog collars on 18 September 2006.
Instrument
TCO No 0615592 was made on 08 December 2006. It declares that those certain bark control dog collars 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. 0615592 is taken to have come into force on 18 September 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. 0615592, enacted under the Customs Act 1901, addresses the issue of applying lower rates of customs duty on specific goods that do not have substitutable alternatives produced in Australia. This instrument was introduced to facilitate tariff concessions for goods that meet certain criteria, specifically those that are not produced domestically in an ordinary course of business and are not listed in the prohibited categories under section 269SJ of the Act. The policy objective, as outlined in the Act, is to provide a mechanism through which applicants can request tariff concessions from the Chief Executive Officer of Customs, who then assesses whether the application meets the core criteria for such concessions. The instrument was developed following an application by Animal Behaviour Systems (Australia) Pty Ltd for tariff concessions on certain bark control dog collars, which was approved after it was determined that no substitutable goods were produced in Australia.
This legislative instrument was enacted by the relevant authorities under the Customs Act 1901 to provide a clear and efficient process for granting tariff concessions. It ensures that the rights of importers are protected and that the application of tariff concessions does not disadvantage any party or impose liabilities for actions taken prior to the instrument's registration. The instrument came into effect on the date the application was lodged, 18 September 2006, and provides that importers may apply for duty refunds on goods imported since that date. The process involved publishing a notice in the Gazette to invite any objections to the tariff concession, which in this case, did not receive any submissions.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO). These orders apply to specific goods and provide for a lower rate of customs duty. An individual or entity may apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, specifically if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If satisfied, the CEO issues a written TCO, applying a specified lower rate from Schedule 4 to the Customs Tariff Act 1995. The CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons against the TCO, although no submissions were received in this case. The TCO in question, No. 0615592, was made on 8 December 2006, and it applies to certain bark control dog collars, granting them a free rate of duty as no substitutable goods were produced in Australia. This order came into effect on 18 September 2006, the date the application was lodged, and does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0615592, under the Customs Act 1901, pertain to the application and creation of Tariff Concession Orders (TCOs) (section 269F). If an applicant, such as Animal Behaviour Systems (Australia) Pty Ltd, seeks a TCO for specific goods—in this case, bark control dog collars—the Chief Executive Officer (CEO) of Customs is required to evaluate the application (section 269C). The CEO must ensure that the goods in question are not prohibited from TCOs under section 269SJ of the Act and that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application (section 269P(3)). If the application meets these criteria, the CEO is mandated to issue a written TCO, specifying the tariff item from Schedule 4 of the Customs Tariff Act 1995 that applies to the goods (section 269P(3)). In this instance, the TCO granted to the bark control dog collars resulted in a duty rate of free, down from the general rate of 5%.
The obligations imposed by the Act on parties or entities it governs are primarily centred on the application process for TCOs. The applicant must ensure that their application is valid and meets the criteria stipulated by sections 269C and 269P(3) of the Act. The CEO, on the other hand, is obligated to assess the application, make a decision based on the criteria, and issue a written TCO if the application is successful. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any interested parties if they believe the TCO should not be made, and consider any submissions received (subsection 269K(1)). In this case, no submissions were received.
Failure to comply with the requirements set out in the Customs Act 1901 may result in various consequences. For instance, if an applicant knowingly provides false or misleading information in their TCO application, they may be subject to civil or criminal penalties, including fines and imprisonment, under the Act. Similarly, if the CEO does not adhere to the legislative requirements when processing a TCO application, they may face disciplinary action or legal consequences. In addition, any person who fails to comply with the terms of the TCO, such as by importing goods that are subject to a TCO without the appropriate duty paid, may be liable for penalties, including fines and imprisonment. The specific penalties for breaches of the Act and its regulations are detailed in the relevant sections of the legislation.