EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0708777
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.
Times Technology (Aust) Pty Ltd applied for a TCO in respect of certain trampolines on 08 June 2007.
Instrument
TCO No 0708777 was made on 17 August 2007. It declares that those certain trampolines 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. 0708777 is taken to have come into force on 08 June 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 Tariff Concession Instrument No. 0708777, made under the Customs Act 1901, aims to address the issue of applying tariff concessions on certain goods that are not produced in Australia. Enacted by the Australian Parliament, this instrument facilitates the application process for Tariff Concession Orders (TCOs), which allow for a lower rate of customs duty on specified goods. The primary objective is to ensure that goods for which a TCO is sought are not already being produced domestically, thus preventing any competitive disadvantage to Australian producers. The instrument was introduced in response to a submission from Times Technology (Aust) Pty Ltd for tariff concessions on certain trampolines, and it became effective on the date of the application, 08 June 2007. This legislative measure ensures that importers of such goods can apply for duty refunds from the effective date, thereby benefiting from the reduced duty rate without incurring any new liabilities.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0708777, applies to the importation of certain trampolines, which are now subject to a reduced rate of customs duty under the scheme established by Part XVA of the Act. The Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, who must determine whether an application for a TCO meets the core criteria specified in section 269C. Specifically, if no substitutable goods are produced in Australia at the time the application is lodged, the CEO is required to make a TCO, as was done for the trampolines in question, resulting in these goods now being subject to a duty rate of free, down from the general rate of 5%. The geographic reach of this legislation is national, with the application of the Act extending throughout Australia, and the benefits of the TCO being available to importers of the specified trampolines.
The application of the TCO does not extend to any goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The CEO is mandated to publish a notice in the Gazette inviting submissions regarding the TCO application, although no submissions were received for this particular TCO. The TCO is deemed to have come into force on the date the application was lodged, which in this case was 8 June 2007. It is important to note that the TCO does not affect the rights of any person as at the date of registration and does not impose any liabilities on any person, thereby ensuring that the rights of importers are beneficially affected by the reduced duty rate.
Key Provisions
The Tariff Concession Instrument No. 0708777 operates under sections 269C and 269P(3) of the Customs Act 1901. These sections enable the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for certain goods. A TCO is granted if the CEO is satisfied that the goods in question are not substitutable by any goods produced in Australia on the day the application was lodged (section 269C). Once the CEO decides that an application meets the core criteria, they are required to make a written order (section 269P(3)). In the specific case of TCO No. 0708777, the CEO declared that certain trampolines are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, resulting in a duty rate of free instead of the general 5%.
The Act imposes several obligations on both applicants and the CEO. An applicant must submit a valid application to the CEO under section 269F, ensuring that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO, upon receiving a valid application, must assess if the core criteria are met and decide whether to make a TCO. The CEO must also publish a notice in the Gazette under subsection 269K(1), inviting submissions from any person who believes there are reasons why the TCO should not be made. This notice was published for TCO No. 0708777, but no submissions were received.
Under the Customs Act 1901, there are specific consequences for non-compliance with the provisions regarding TCOs. While the explanatory statement does not explicitly outline criminal or civil penalties for breaches related to TCOs, it is reasonable to infer that general provisions within the Customs Act and associated regulations could apply. These might include fines, imprisonment, or other civil remedies for non-compliance. For instance, breaches of other sections within the Customs Act, such as fraudulent claims or misrepresentation, could result in substantial penalties. However, the specific penalties for breaches directly related to TCOs are not detailed in the provided explanatory statement. The rights of importers are safeguarded to ensure they are not disadvantaged by the TCO, and they can apply for refunds of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.