EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619300
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.
Kelly Company Pty Ltd applied for a TCO in respect of certain eyewear cleaners on 4 December 2006.
Instrument
TCO No 0619300 was made on 2 March 2007. It declares that those certain eyewear cleaners 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 7.5%. 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. 0619300 is taken to have come into force on 4 December 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, enacted by the Australian Parliament, governs the importation and exportation of goods and includes provisions for tariff concession orders (TCOs) to reduce customs duty on certain goods. The Tariff Concession Instrument No. 0619300, published on 2 March 2007, was introduced to address the application by Kelly Company Pty Ltd for tariff concessions on specific eyewear cleaners. The instrument declares that these eyewear cleaners are subject to a 0% duty rate, down from the general 7.5%, upon the satisfaction by the Chief Executive Officer of Customs that no substitutable goods were produced in Australia. This initiative aims to facilitate trade by reducing the financial burden on importers of these specific goods, without imposing liabilities or disadvantaging any party as per the provisions outlined in the Customs Act 1901.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines the framework for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs to reduce the customs duty on certain goods. The application of a TCO is contingent on the goods not being produced in Australia in the ordinary course of business and the absence of substitutable goods available domestically. An entity or individual can apply to the CEO for a TCO, and if the application meets the core criteria as stipulated in the Act, the CEO must issue a written order that effectively reduces the applicable customs duty on the specified goods. This legislation applies nationally, influencing the import duty rates across the Commonwealth of Australia. Notably, the application of this Act is restricted to goods that are not specified in section 269SJ, which excludes certain items from tariff concessions. The commencement of a TCO is effective from the date the application is lodged, providing immediate benefit to importers who can apply for duty refunds on eligible goods. The scope of the Act is further extended through subordinate instruments which may detail specific conditions or exceptions under which TCOs can be applied.
Key Provisions
The main operative sections of this legislation concern Tariff Concession Orders (TCOs) and their application, as well as the requirements for making such orders. Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the CEO determines that the application is not for goods specified in section 269SJ, which lists goods that cannot be subject to a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. This involves determining whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring that the goods are subject to a specified item of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on the parties involved are primarily centred around the application and assessment process for TCOs. The CEO must, upon accepting a TCO application as valid, publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO is also required to make a decision on the application based on the criteria set out in the Act. In this case, Kelly Company Pty Ltd applied for a TCO for certain eyewear cleaners, and the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0619300. The CEO did not receive any submissions opposing the TCO.
The legislation also outlines the consequences of breaches or non-compliance. While the explanatory statement does not detail specific offences or penalties for breach of the Act or TCOs, it is understood that failure to comply with the requirements of the Customs Act 1901 or any related regulations could result in civil or criminal penalties. These may include fines and, in more severe cases, imprisonment. The specific penalties would depend on the nature and severity of the breach, as well as any relevant regulations and court decisions. Additionally, the TCO itself does not impose any liabilities on any person and does not affect the rights of persons other than the Commonwealth as at the date of registration.