EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0704677
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.
Outlook Australia Pty Ltd applied for a TCO in respect of certain baby carriage sunshades on 28 March 2007.
Instrument
TCO No 0704677 was made on 15 June 2007. It declares that those certain baby carriage sunshades 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 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. 0704677 is taken to have come into force on 28 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 enacted by the Parliament of Australia and establishes a framework for the regulation of customs and excise duties. The Act was introduced to facilitate trade by providing mechanisms for the administration of customs and excise, including the ability to grant tariff concessions. Specifically, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the rate of customs duty on certain goods. The primary objective of this legislation is to ensure that Australian businesses and consumers benefit from reduced duty rates on goods for which no substitutable Australian-made alternatives exist. The explanatory statement for Tariff Concession Instrument No. 0704677 clarifies that the instrument was created following an application by Outlook Australia Pty Ltd for tariff concessions on baby carriage sunshades. The instrument was issued after it was determined that no substitutable goods were produced in Australia, thereby meeting the core criteria stipulated under the Customs Act. The tariff rate for these goods was set at zero, effectively providing relief to importers and benefiting consumers by reducing the cost of these imported items.
Scope and Application
The Customs Act 1901 applies to any individual or entity seeking tariff concessions for specific goods imported into Australia. The act allows for the application of lower rates of customs duty on goods that are the subject of a Tariff Concession Order (TCO). The TCO mechanism is overseen by the Chief Executive Officer of Customs, who has the authority to make TCOs under section 269F of the Act, provided the application meets the core criteria outlined in section 269C. These criteria include ensuring that no substitutable goods are produced in Australia at the time of application, as defined under sections 269D and 269E of the Act. The application process requires the CEO to publish a notice in the Gazette to invite any interested party to submit objections, though in this instance, no submissions were received. The geographic reach of the Act is national, as it applies to the entire Commonwealth of Australia, and the TCOs extend to the prescribed items of Schedule 4 to the Customs Tariff Act 1995. Notably, the Act does not impose liabilities on any person beyond the Commonwealth and does not disadvantage any person by affecting their rights as at the date of registration.
Key Provisions
The main sections of the Tariff Concession Instrument No. 0704677 include section 269C, which establishes the criteria for the Chief Executive Officer of Customs (CEO) to consider when deciding whether to grant a Tariff Concession Order (TCO) (section 269C). A TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Section 269P(3) requires the CEO to issue a written TCO if satisfied that the application meets these criteria, specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). The instrument, TCO No. 0704677, declares that certain baby carriage sunshades are subject to a zero rate of duty, as opposed to the general rate of 7.5% (section 269P(3)).
The obligations under this Act for parties include the requirement for any person to apply to the CEO for a TCO if they wish to benefit from a lower rate of customs duty (section 269F). The CEO must assess whether the application meets the core criteria and decide on the issuance of a TCO based on this assessment (section 269C). Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be made, and consider any submissions received (subsection 269K(1)). The CEO is also responsible for ensuring that the TCO does not impose any liabilities on any person beyond the Commonwealth (subsection 269S(1)).
There are no specific offences or penalties outlined in this instrument; however, failure to comply with the terms of a TCO or the Customs Act 1901 could lead to civil or criminal consequences under the broader legislative framework. The Customs Act 1901 includes provisions for penalties for offences such as false statements or fraudulent behaviour in connection with customs duties, which could include fines and imprisonment. The specific penalties for such breaches are detailed elsewhere in the Customs Act 1901 and associated regulations.