EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708245
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.
Ilana Accessories Australia Pty Ltd applied for a TCO in respect of certain car seat covers on 31 May 2007.
Instrument
TCO No 0708245 was made on 14 September 2007. It declares that those certain car seat covers 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 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. One submission objecting to the TCO application was received from Melba Industries.
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. 0708245 is taken to have come into force on 31 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 was enacted by the Parliament of Australia to regulate the importation and exportation of goods, including the imposition of customs duties. The Act provides for the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made, thereby reducing the rate of customs duty for certain goods. The enactment of Part XVA of the Act addresses the gap in providing relief from customs duty for goods where no substitutable goods are produced in Australia. Tariff Concession Instrument No. 0708245 was made on 14 September 2007, in response to an application by Ilana Accessories Australia Pty Ltd for a TCO in respect of certain car seat covers. The policy objective of this Instrument is to ensure that if a TCO application meets the core criteria, a written order is issued, as per section 269P(3) of the Act, thereby providing relief from customs duty where appropriate. The Instrument declares that certain car seat covers are subject to a 0% duty rate, down from the general rate of 7.5%, as no substitutable goods were produced in Australia at the time of the application.
Scope and Application
The Tariff Concession Instrument No. 0708245 made under the Customs Act 1901 applies to goods specified in the instrument, namely certain car seat covers, and the application was made by Ilana Accessories Australia Pty Ltd. The instrument operates by granting tariff concessions on these goods, effectively reducing the customs duty from the general rate of 7.5% to 0%. The instrument applies nationally within Australia as it is an instrument under the Commonwealth’s customs laws. The scope of the Act extends to any entity or individual importing the specified goods, thus benefiting importers by potentially reducing their duty obligations. The application of the TCO is not restricted by any jurisdictional boundaries within Australia. However, the Act excludes certain goods from being subject to a TCO as specified in section 269SJ, which includes goods that are or could be produced in Australia in the ordinary course of business. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons for actions taken prior to the instrument’s effective date.
Key Provisions
The main operative sections of this legislation focus on the creation and implementation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows individuals or entities to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ, which outlines goods ineligible for a TCO, the CEO must then assess whether the application meets the core criteria outlined in section 269C. This section stipulates that the application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ are provided in sections 269D, 269E, and 269P respectively. If the CEO is satisfied that the application meets these criteria, they are mandated by subsection 269P(3) to issue a written order (a TCO), specifying the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes specific obligations on the parties involved. The CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). This ensures transparency and allows interested parties to voice their objections. Additionally, the CEO is required to evaluate whether the application meets the core criteria before issuing a TCO. The TCO itself, as outlined in section 269S, is taken to have come into force on the day the application was lodged, ensuring timely implementation and benefits for importers.
Failure to comply with the provisions of the Customs Act 1901, including those related to TCOs, may result in various consequences. While the explanatory statement does not specify particular offences or penalties, breaches of customs legislation generally can lead to civil or criminal penalties. Civil penalties may include fines, while criminal penalties might involve imprisonment, depending on the severity of the breach. The Act's provisions are designed to ensure that the rights of individuals and entities are protected, and that any imposition of tariffs is fair and in compliance with the stipulated criteria. Importers, in particular, are afforded the right to apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.