EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705202
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.
Sperling Enterprises Pty Ltd applied for a TCO in respect of certain travel sets on 04 April 2007.
Instrument
TCO No 0705202 was made on 29 June 2007. It declares that those certain travel sets 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. 0705202 is taken to have come into force on 04 April 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 Parliament of Australia, provides a framework for the regulation of goods entering and leaving the country, including the imposition of customs duties. To address specific economic or trade policy objectives, the Act allows for the creation of Tariff Concession Orders (TCOs) under Part XVA, which can reduce the customs duty on certain goods. This instrument, Tariff Concession Instrument No. 0705202, was introduced to provide tariff concessions on particular travel sets by reducing the duty from the general rate of 10% to free, in response to an application by Sperling Enterprises Pty Ltd. The application process requires that no substitutable goods are produced in Australia, and after the Chief Executive Officer of Customs was satisfied with the application and no objections were received, the TCO was issued, effective from the date of the application, 04 April 2007.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, allowing for reduced rates of customs duty on certain goods. Specifically, this Act applies to individuals or entities that seek tariff concessions for goods, provided that the application aligns with the core criteria outlined in the Act. For instance, if no substitutable goods are produced in Australia on the date the application is lodged, a TCO can be issued. The Act also specifies that goods which cannot be subject to a TCO are those outlined in section 269SJ. The application of this legislation extends across the Commonwealth of Australia, impacting the importation of goods that meet the conditions set forth. The application of the Act is further refined through the issuance of subordinate instruments such as Tariff Concession Orders, which delineate specific goods eligible for tariff concessions and the corresponding duty rates. It is important to note that the Act does not affect the rights of any person, other than the Commonwealth, in a manner that would disadvantage them or impose liabilities for actions taken prior to the issuance of a TCO.
Key Provisions
The primary operative sections of this legislation are sections 269F, 269C, 269B, and 269P of the Customs Act 1901, which outline the process for applying for and granting Tariff Concession Orders (TCOs). Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application meets the core criteria under section 269C (1), a TCO must be made, declaring that the goods specified in the application are subject to a prescribed rate of duty (subsection 269P(3)). The core criteria, as defined by section 269C (1), require that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are provided in sections 269D, 269E, and 269B, respectively.
The Act imposes several obligations on the parties involved. Firstly, any person wishing to apply for a TCO must ensure their application is lodged with the CEO and complies with the requirements of section 269F. The CEO, upon accepting a TCO application as valid, must publish a notice in the Gazette inviting any interested parties to submit any objections to the making of the TCO (subsection 269K(1)). The CEO must then consider any submissions received and make a decision on whether the application meets the core criteria under section 269C. If the CEO determines that the application meets these criteria, they must make a written order, declaring the goods subject to a reduced rate of duty.
The Act does not explicitly outline any offences, penalties, or civil/criminal consequences for breaches of the TCO provisions. However, general provisions of the Customs Act 1901 and associated regulations may apply where there is non-compliance with the Act's requirements. For example, section 236 of the Customs Act 1901 provides that any person who contravenes a provision of the Act is liable to a penalty not exceeding 10,000 penalty units or, in the case of a continuing failure to comply, a penalty not exceeding 1,000 penalty units for each day of the failure. The maximum penalty for these offences can therefore be significant, depending on the nature and duration of the breach.