EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708065
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.
Thermos Pty Ltd applied for a TCO in respect of certain cooler bags on 29 May 2007.
Instrument
TCO No 0708065 was made on 24 August 2007. It declares that those certain cooler bags 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. 0708065 is taken to have come into force on 29 May 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 Commonwealth Parliament, provides the legal framework for the administration of customs and excise in Australia. The Act was introduced to regulate the importation and exportation of goods and to collect customs duties and excise on certain goods. Part XVA of the Act facilitates the application of tariff concession orders (TCOs) to lower the rate of customs duty on specified goods, subject to certain conditions. The explanatory statement for Tariff Concession Instrument No. 0708065, made on 24 August 2007, clarifies the process by which the Chief Executive Officer of Customs considers applications for TCOs and the policy objective of ensuring that no substitutable goods are produced in Australia at the time of application. Thermos Pty Ltd successfully applied for a TCO on certain cooler bags, resulting in a tariff concession that effectively made the duty on these goods free, down from the general rate of 5%.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which reduce the rate of customs duty on specified goods. This applies to individuals or entities who seek to import goods that are not produced in Australia and that do not substitute any domestically produced goods. The application of the Act is Commonwealth-wide, applying across all states and territories of Australia. Exclusions are detailed under section 269SJ of the Act, which outlines goods that cannot be subject to a TCO, although these are not explicitly stated in the explanatory statement. The instrument in question, TCO No. 0708065, applies to certain cooler bags, reducing the duty rate from the general 5% to free, provided the CEO is satisfied that no substitutable goods are produced in Australia. The application of the Act may be extended through subordinate instruments, though these are not detailed in the explanatory statement.
Key Provisions
The primary sections of the Customs Act 1901 (section 269F and 269C) provide that a person may apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) for certain goods, provided the application meets the core criteria. Specifically, section 269C of the Act requires that the CEO must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these conditions are met, the CEO must make a written order (section 269P(3)) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily focused on the application process and the criteria for approving a TCO. For applicants, the main obligation is to ensure that their application is lodged correctly and meets the specified criteria, particularly that no substitutable goods were produced in Australia. The CEO, on the other hand, is required to review the application, make a determination based on the core criteria, and, if satisfied, issue a TCO. Additionally, the CEO must publish a notice in the Gazette (section 269K(1)) inviting submissions from any person who may have reasons to object to the TCO.
The Act also outlines the consequences for breaches of its provisions. Although the explanatory statement does not specify any particular offences or penalties, it is reasonable to infer that any misuse of the TCO provisions, such as submitting false information in an application or abusing the tariff concessions, could result in penalties under the Customs Act 1901 or other relevant legislation. The penalties for such breaches could include fines or imprisonment, depending on the severity and nature of the offence. The specific penalties are not detailed in the explanatory statement but would typically be found in the relevant sections of the Act or associated regulations.