EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0701303
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.
The Reject Shop Limited applied for a TCO in respect of certain car mats on 25 January 2007.
Instrument
TCO No 0701303 was made on 20 April 2007. 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 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. 0701303 is taken to have come into force on 25 January 2007.
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, established a framework for the imposition of tariffs on imported goods. To address the issue of ensuring fair and competitive pricing for certain imported goods, Part XVA of the Act introduced the scheme for Tariff Concession Orders (TCOs). These orders, made by the Chief Executive Officer of Customs, allow for a lower rate of customs duty on specified goods when it is determined that no substitutable goods are produced in Australia. The explanatory statement for Tariff Concession Instrument No. 0701303 details the process undertaken by the CEO in response to an application from The Reject Shop Limited for a TCO on certain car mats. After satisfying the core criteria under section 269C, the CEO made a written order, effective from the date of the application, 25 January 2007, granting the concession and setting the duty rate at free, down from the general rate of 10%. This instrument aimed to provide relief to importers and ensure they were not disadvantaged by the tariff changes.
Scope and Application
The Tariff Concession Instrument No. 0701303, made under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been granted. In this case, the instrument pertains to certain car mats that were the subject of an application by The Reject Shop Limited. The Act allows for the application of lower customs duties on goods specified in a TCO, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The instrument is applicable to the goods listed, and the geographic scope is national, as it falls under the Commonwealth's jurisdiction. The TCO, which came into force on the date the application was lodged, provides a tariff concession, reducing the duty on these car mats from 10% to free. This instrument does not affect any pre-existing rights or impose liabilities on any person, except to the extent that it benefits importers by allowing them to claim a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, specifically Part XVA, details the procedure and criteria for Tariff Concession Orders (TCOs) under section 269F, allowing for a lower rate of customs duty on goods that are subject to a TCO. An application for a TCO can be submitted by any person to the Chief Executive Officer of Customs (CEO), provided it does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. If the CEO is convinced that the application does not involve these ineligible goods, the application must meet the core criteria outlined in section 269C. This criterion requires that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined in section 269D as goods produced in Australia that are put, or capable of being put, to a use that corresponds with the use of the goods the subject of the application.
The obligations imposed by the Act on the CEO include making a written order if the application meets the core criteria, as specified in section 269P(3). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made, in accordance with subsection 269K(1). The TCO is deemed to have come into force on the day the application was lodged, as per subsection 269S(1). In the case of TCO No. 0701303, which applies to certain car mats, the TCO was made on 20 April 2007, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a free rate of duty as opposed to the general rate of 10%.
For breaches of the provisions under the Customs Act 1901, various penalties and consequences can apply, though the specific details are not elaborated upon in this explanatory statement. Generally, the Act could impose fines and other penalties for non-compliance with customs regulations, and in more severe cases, criminal charges may be pursued. The maximum penalties would depend on the specific nature of the breach and would be determined by the courts in accordance with the relevant provisions of the Act. The TCO itself does not disadvantage any person, nor does it impose liabilities on anyone except the Commonwealth, ensuring that the rights of importers will be beneficially affected, particularly in the context of duty refunds for goods imported since the TCO came into force.