EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0617788
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.
Sperling Enterprises Pty Ltd applied for a TCO in respect of certain car mats on 19 October 2006.
Instrument
TCO No 0617788 was made on 29 December 2006. It declares that those certain car mats 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 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. 0617788 is taken to have come into force on 19 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 Customs Act 1901 was enacted to provide a framework for the administration of customs and excise duties in Australia. The Tariff Concession Instrument No. 0617788, made in 2006 under the authority of the Customs Act, addresses the need to provide tariff concessions for certain imported goods, in this case, specific car mats. This instrument was introduced to allow for the application of a lower rate of customs duty on these goods, thereby offering economic benefits to importers and potentially reducing costs for consumers. The instrument was made by the Chief Executive Officer of Customs, who is responsible for administering the Customs Act. The policy objective underpinning this measure is to facilitate trade and economic efficiency by ensuring that certain imported goods are not subject to higher customs duties, thus aligning with broader trade policy goals of the Australian government.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This mechanism allows for reduced customs duties on certain goods, provided that an application for such a concession is made and approved by the CEO. The scope of the Act applies to any individual or entity seeking to import goods into Australia that are not already being produced domestically, and which do not fall under the restricted list of goods specified in section 269SJ. The Act’s jurisdictional reach is national, as it operates under the authority of the Commonwealth of Australia. Importantly, the Act also outlines that the creation of TCOs is contingent upon the absence of substitutable goods being produced in Australia at the time of application, as defined by sections 269C, 269D, 269E and 269F. In the instance of TCO No. 0617788, the CEO determined that the application met the core criteria, leading to the issuance of a concession that effectively nullifies the duty on certain car mats, reducing the standard rate of 10% to 0%. This legislative instrument does not disadvantage any existing parties and provides a pathway for importers to seek duty refunds for goods imported since the TCO's effective date.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0617788 (the Instrument) pertain to the granting of tariff concessions under the Customs Act 1901 (the Act). Specifically, section 269C of the Act sets forth the criteria for tariff concession orders (TCOs) and section 269P(3) mandates the Chief Executive Officer of Customs (CEO) to issue a written TCO if the application meets the core criteria. Section 269F allows a person to apply for a TCO in respect of goods, provided they are not specified in section 269SJ, which lists goods ineligible for tariff concessions. The Instrument, TCO No. 0617788, declares that certain car mats are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a reduction of the duty rate from 10% to 0%. This Instrument came into force on 19 October 2006, the date on which the application was lodged, as stipulated in subsection 269S(1) of the Act.
The obligations and requirements imposed by the Act on the parties and entities it governs primarily centre on the application process for tariff concessions. An applicant must ensure their application does not concern goods listed in section 269SJ of the Act and must meet the core criteria outlined in section 269C. The CEO has an obligation to assess whether the application meets these criteria, specifically ensuring that no substitutable goods were produced in Australia on the day the application was lodged. If the criteria are met, the CEO must issue a written TCO as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette, inviting any interested parties to submit objections to the TCO, as required by subsection 269K(1) of the Act.
The Act also outlines consequences for breaches related to the tariff concession process. If the CEO does not follow the legislative requirements, they may be subject to administrative or judicial review. For the applicant, failure to comply with the application criteria may result in the application being rejected. There are no specific criminal penalties mentioned in the text for breach of the tariff concession process. However, any person adversely affected by the issuance of a TCO may seek a review or appeal under the Administrative Appeals Tribunal Act 1975, potentially leading to the TCO being set aside if it is found to be unlawful or unjust.