EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0702889
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.
Coleman Brands Pty Limited applied for a TCO in respect of certain fold up grills and/or stoves on 23 February 2007.
Instrument
TCO No 0702889 was made on 18 May 2007. It declares that those certain fold up grills and/or stoves 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. 0702889 is taken to have come into force on 23 February 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 was enacted by the Parliament of Australia to regulate and facilitate the customs process, including the imposition of customs duty on imported goods. Part XVA of the Act establishes a scheme for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This scheme allows for lower rates of customs duty on specified goods, provided certain criteria are met. The Tariff Concession Instrument No. 0702889, enacted in 2007, addresses the need to provide tariff concessions for goods where no substitutable products are produced in Australia. This concession aims to benefit importers by potentially reducing the cost of imported goods and facilitating trade. The policy objective of this instrument is to support economic activity by ensuring that Australian importers are not disadvantaged when importing goods for which no local alternatives exist.
Scope and Application
The Customs Act 1901, specifically through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to individuals or entities that wish to apply for a tariff concession on certain goods, provided those goods are not specified as ineligible under section 269SJ. The process involves a TCO application being assessed against the core criteria outlined in section 269C, which includes the determination that no substitutable goods are produced in Australia. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, effectively lowering the duty on the specified goods. The geographic and jurisdictional reach of the Act is national, as it pertains to the Customs operations across Australia. The Act also provides for the exclusion of certain goods from TCOs and ensures that the rights of persons other than the Commonwealth are not adversely affected by the implementation of a TCO. The TCOs are effective from the date of application, allowing for immediate benefits to importers who can apply for refunds of duty paid on eligible goods.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, 269K, 269P, and 269S of the Customs Act 1901, which detail the process for applying for and issuing a Tariff Concession Order (TCO). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods, provided these goods are not specified in section 269SJ. The CEO must then determine whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must make a written order, as per section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively granting a tariff concession.
The Act imposes several obligations and requirements on the parties involved. For the applicant, such as Coleman Brands Pty Limited, it is necessary to ensure that their application for a TCO is valid and that the goods in question meet the core criteria. The CEO, on the other hand, must promptly assess the application, publish a notice in the Gazette inviting any submissions against the TCO, and decide whether to issue the order. Additionally, the CEO must ensure that the rights of any person other than the Commonwealth are not adversely affected by the TCO, which is a crucial safeguard in the legislation.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in both civil and criminal consequences. While the Act does not explicitly state penalties for breaches, contraventions of the Act can lead to fines and even imprisonment under general provisions for breaches of the Customs Act and related regulations. The exact penalties would be determined by the courts based on the specific nature and severity of the breach.
The Tariff Concession Order No. 0702889, which was issued on 18 May 2007, provides a tariff concession for certain fold-up grills and/or stoves, reducing the duty from 5% to free. This order came into force on the date the application was lodged, 23 February 2007, and does not affect any rights or impose any liabilities on any person other than the Commonwealth in respect of actions taken before the order's registration. Importers of these goods will benefit from the concession and can apply for a refund of duty paid on goods imported since the TCO's effective date.