EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617299
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.
Kmart Australia Ltd applied for a TCO in respect of certain cookware on 18 September 2006.
Instrument
TCO No 0617299 was made on 8 December 2006. It declares that those certain cookware 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. 0617299 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. 0617299 was enacted under the Customs Act 1901 to address the need for a streamlined process through which businesses could apply for tariff concessions on specific imported goods. This legislation was introduced by the Commonwealth and aims to provide relief to businesses by allowing them to apply for a Tariff Concession Order (TCO) to reduce or eliminate customs duty on certain imported goods. The instrument was made on 8 December 2006 by the Chief Executive Officer of Customs, following an application by Kmart Australia Ltd for certain cookware, which was approved as there were no substitutable goods produced in Australia. This concession resulted in a reduction of the duty rate from 5% to 0%. The process was subject to public consultation, though no submissions were received. The TCO came into force on 18 September 2006, the date of the application, and does not disadvantage any person or impose liabilities on anyone other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the making of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs (CEO), thereby allowing for a lower rate of customs duty on certain goods. This provision applies to any person or entity that meets the criteria set out in section 269C of the Act, whereby a TCO application is deemed to meet the core criteria if, on the date the application was submitted, there were no substitutable goods produced in Australia in the ordinary course of business. The Act's application is nationwide, affecting all states and territories within the Commonwealth of Australia. It is important to note that the Act does not apply to goods specified in section 269SJ, which includes certain types of goods that cannot be subject to a TCO. Furthermore, the Act may extend its application through subordinate instruments, such as regulations, which may provide additional details or criteria for the implementation of TCOs.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F permits an application for a Tariff Concession Order (TCO) from a person, and section 269C outlines the core criteria that must be satisfied for such an application to be considered. Specifically, the application will be considered if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, section 269P requires the Chief Executive Officer of Customs (the CEO) to make a written order that declares the goods in question are subject to a lower rate of duty as specified in the order.
The obligations imposed by the Act on the parties involved are primarily on the CEO and the applicant. The CEO must ensure that any application for a TCO meets the core criteria specified in the Act, and if satisfied, make a written order declaring the goods subject to a lower rate of duty. The applicant must provide all necessary information to demonstrate that the goods meet the criteria for a TCO, including evidence that no substitutable goods were produced in Australia. The Act also requires the CEO to publish a notice in the Gazette, inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission.
There are no explicit offences, penalties, or consequences for breach outlined in this particular legislation. However, failure to comply with the requirements of the Act and the Regulations, such as providing false information in an application, could potentially lead to civil or criminal consequences under broader provisions of Australian law. For example, providing false information to the CEO could be considered an offence under the Crimes Act 1914, which carries significant penalties, including fines and imprisonment.