EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618607
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.
L.E. Whittaker & Sons Pty Ltd applied for a TCO in respect of certain insulated soft sided cooler bags on 16 November 2006.
Instrument
TCO No 0618607 was made on 02 February 2007. It declares that those certain insulated soft sided cooler bags 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. 0618607 is taken to have come into force on 16 November 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. 0618607, enacted under the Customs Act 1901, was introduced to address the need for concessional tariff rates on specific goods, in this case, certain insulated soft sided cooler bags. This legislation was developed to assist businesses by reducing the customs duty on these goods, thereby making them more competitively priced against imported alternatives. The instrument was introduced by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders under section 269F of the Act. The primary policy objective of this instrument is to provide tariff relief for goods that are not being produced domestically, thereby encouraging trade and economic efficiency.
The instrument came into effect on 16 November 2006, the date on which the application for the tariff concession was lodged. L.E. Whittaker & Sons Pty Ltd applied for this concession on that date, and following the CEO's determination that no substitutable goods were being produced in Australia, the instrument was issued on 2 February 2007. This instrument ensures that the general rate of duty for the specified goods is reduced to free, benefiting importers who can apply for a refund of duty paid on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0618607 applies to specific insulated soft-sided cooler bags, which are subject to a Tariff Concession Order (TCO) under the Customs Act 1901. This legislation is designed to provide a lower rate of customs duty on goods that meet the specified criteria, and in this case, the CEO was satisfied that the application for these cooler bags met the core criteria set out in the Act. The application of the TCO affects the customs duties applicable to these particular goods, altering the duty rate from the general 5% to a free rate for the goods specified in the TCO. This Act applies nationally across Australia as it is a Commonwealth Act, thus having a broad jurisdictional reach. The Act does not impose any liabilities on any person, including importers, and instead beneficially affects their rights by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. Any exclusions or limitations are defined within the Act itself, and the TCO does not disadvantage any person or impose liabilities in respect of anything done or omitted before the TCO's registration date.
Key Provisions
The main operative sections of this legislation are sections 269C, 269P, and 269S. Section 269C (1) sets the criteria for a Tariff Concession Order (TCO), requiring that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P (3) states that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must make a written order (a TCO). Section 269S (1) provides that a TCO is taken to have come into force on the day the application for the TCO was lodged.
The Act imposes obligations on the CEO to process TCO applications, determine if they meet the core criteria, and make a written order if satisfied. It also requires the CEO to publish a notice in the Gazette inviting submissions if the application is considered valid. For applicants, the key requirement is to lodge a valid application that satisfies the core criteria for a TCO.
There are no specific offences outlined in this legislation, but non-compliance with the requirements for a TCO could potentially lead to administrative penalties. If the CEO fails to process applications properly or make a written order when required, this could be challenged under the Administrative Appeals Tribunal Act 1975. There are no stated penalties for breach in this explanatory statement, but any failure to comply with the requirements of the Customs Act 1901 could result in penalties under that Act. For example, section 236 of the Customs Act 1901 provides for penalties for making false statements or using false documents in connection with the importation or exportation of goods. The maximum penalty for a serious offence is imprisonment for five years or a fine of up to $22,000, or both.