EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0703434
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.
Target Australia Pty Ltd applied for a TCO in respect of certain wine coolers on 2 March 2007.
Instrument
TCO No 0703434 was made on 25 May 2007. It declares that those certain wine coolers 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 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. 0703434 is taken to have come into force on 2 March 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 amended to include a scheme for Tariff Concession Orders (TCOs) which allows for the application of lower rates of customs duty on certain goods. This initiative was introduced to address the gap in facilitating the importation of goods that are not produced in Australia, thereby encouraging trade and economic growth. Enacted by the Parliament of Australia, the objective of this legislation is to streamline the customs duty application process, ensuring that businesses are not unduly burdened by high tariffs on goods that cannot be domestically produced. Tariff Concession Instrument No. 0703434, made under this Act, demonstrates the practical application of the scheme by reducing the customs duty on specified wine coolers from 5% to 0%, following an application by Target Australia Pty Ltd. The process involved satisfying the core criteria that no substitutable goods were produced in Australia, and the order came into effect from the date of the application, 2 March 2007.
Scope and Application
The Tariff Concession Instrument No. 0703434, pursuant to Part XVA of the Customs Act 1901, applies to entities seeking tariff concessions for specific goods, namely certain wine coolers in this case, through the process of applying for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. This legislation is designed to facilitate the importation of goods by applying a lower rate of customs duty on specified items, provided that no substitutable goods are produced in Australia in the ordinary course of business, and the application meets the core criteria set out in the Act. The primary beneficiaries of this concession are importers of the specified goods, who can apply for a refund of duty on goods imported since the day the TCO is deemed to have come into force. The geographic reach of this legislation is national, operating under the framework of Commonwealth law, and it does not impose any liabilities on any person beyond the Commonwealth. The instrument does not affect the rights of any person as at the date of registration, ensuring that no person other than the Commonwealth is disadvantaged or subjected to new liabilities as a result of the TCO.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0703434 under the Customs Act 1901 (sections 269C, 269F, and 269P(3)) outline the process and criteria for the Chief Executive Officer of Customs (CEO) to consider when deciding on Tariff Concession Orders (TCO). If a TCO application is made by a person (section 269F), and the CEO determines that the application does not relate to goods that cannot be subject to a TCO (section 269SJ), the CEO must then assess if the application meets the core criteria (section 269C). This includes ensuring that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C, 269D, 269E). If the CEO is satisfied that the application meets the core criteria, they must make a written TCO order (section 269P(3)).
The obligations imposed by this legislation on parties include the requirement for applicants to ensure their TCO applications are valid and not in respect of goods specified in section 269SJ of the Act. Additionally, the CEO has the obligation to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to submit reasons why the TCO should not be made (subsection 269K(1)). The CEO must also decide whether to make the TCO based on whether the application meets the core criteria, as specified in section 269C. Furthermore, the Act ensures that the rights of persons (other than the Commonwealth) will not be adversely affected by the TCO as at the date of registration (subsection 269S(1)).
Under the Customs Act 1901, there are no specific offences, penalties, or civil/criminal consequences outlined in the text for breaches related to TCO applications. However, any party aggrieved by a decision of the CEO regarding a TCO may have recourse to other sections of the Act or related legislation, which might include avenues for review or appeal. The TCO itself is a regulatory measure aimed at facilitating tariff concessions and does not introduce new penalties or sanctions for non-compliance with its provisions. The primary focus is on ensuring that the tariff concessions are granted in accordance with the established criteria and processes.