EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0615785
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.
Greengauge Australia Pty Ltd applied for a TCO in respect of certain woven carpet indoor and outdoor bowling surfaces on 13 October 2006.
Instrument
TCO No 0615785 was made on 06 March 2007. It declares that those certain woven carpet indoor and outdoor bowling surfaces 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 10%. 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. 0615785 is taken to have come into force on 13 October 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. 0615785 was enacted under the Customs Act 1901 to address the issue of providing tariff concessions on specific goods, in this case, certain woven carpet indoor and outdoor bowling surfaces. The Act was introduced to streamline the application process for tariff concessions by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that meet certain criteria, specifically where no substitutable goods are produced in Australia. The instrument was published in the Gazette on 6 March 2007 and was made in response to an application by Greengauge Australia Pty Ltd on 13 October 2006. The policy objective is to facilitate trade by reducing customs duties on specific imported goods, thereby promoting competitive pricing and accessibility for consumers. The enactment of this TCO ensures that the rights of importers are protected and can benefit from duty refunds on goods imported since the effective date of the TCO.
Scope and Application
The Customs Act 1901 applies to all individuals and entities engaged in importing goods into Australia, including importers, manufacturers, and distributors. The Act provides the framework for the administration of customs duties and the regulation of imports, including the process for making Tariff Concession Orders (TCOs). Under this Act, the Chief Executive Officer of Customs (CEO) has the authority to issue TCOs that can lower the customs duty on certain imported goods. The scope of the Act is national, applying across all states and territories of Australia. The Act includes specific provisions for the application process, such as the requirement to ensure that no substitutable goods are produced in Australia in the ordinary course of business. The Act also includes provisions for the publication of TCO applications in the Gazette and the consideration of any submissions received. Exclusions from the application of TCOs are outlined in section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The application of the Act may be extended or restricted by subordinate instruments, such as regulations and orders, which provide further detail on the administration and enforcement of the Act.
Key Provisions
The Customs Act 1901, particularly Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders can reduce the rate of customs duty on specified goods. When a person applies for a TCO, the CEO first checks if the goods fall within the scope of section 269SJ, which excludes certain goods from concession. If not excluded, the CEO assesses if the application meets the core criteria outlined in section 269C. These criteria require that, on the date of the application, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. Once the CEO confirms the application meets the core criteria, they issue a written TCO, specifying the goods and the applicable rate from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Customs Act on the parties involved are primarily on the CEO to assess and decide on TCO applications. The CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the concession. They must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose any new liabilities on such persons for actions taken before the TCO's effective date. For the applicants, such as Greengauge Australia Pty Ltd, the obligation lies in providing sufficient information and justification for their TCO application. The Act also ensures that importers benefit from the TCO by allowing them to apply for duty refunds on imports since the TCO's effective date.
Under the Customs Act, breaches or non-compliance with the provisions related to TCOs may lead to various consequences. The Act does not specify particular offences or penalties for failing to adhere to the TCO provisions. However, general legal consequences may apply, such as disputes over duty refunds or other customs-related matters. For example, if an importer incorrectly claims a refund or if the CEO fails to properly assess an application, legal action could be taken in the relevant courts. While the Act does not detail specific penalties for TCO-related breaches, penalties for broader customs violations can include fines and imprisonment under other sections of the Customs Act.