EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0710499
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.
Amer Sports Australia Pty Ltd applied for a TCO in respect of certain novelty replica tennis balls on 05 July 2007.
Instrument
TCO No 0710499 was made on 02 October 2007. It declares that those certain novelty replica tennis balls 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. 0710499 is taken to have come into force on 05 July 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. 0710499, enacted in 2007 under the Customs Act 1901, aims to address the need for tariff concessions on specific goods that are not produced domestically in the ordinary course of business. This instrument facilitates the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, thereby allowing for lower rates of customs duty on imported goods that have no substitutable Australian-made equivalents. The policy objective is to ensure that the application process for TCOs is transparent and allows for public consultation, as evidenced by the publication of the Amer Sports Australia Pty Ltd application in the Gazette with no submissions received in opposition. The commencement of this instrument aligns with the date of the application, ensuring that the rights of importers are protected and can benefit from duty refunds on eligible goods imported since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0710499 is an instrument made under the Customs Act 1901 and applies to the concession of customs duty rates on certain goods, specifically novelty replica tennis balls. This instrument was made in response to an application by Amer Sports Australia Pty Ltd for a Tariff Concession Order (TCO) on these goods, and it was implemented on 02 October 2007. The Act allows the Chief Executive Officer of Customs to make a TCO if no substitutable goods are produced in Australia in the ordinary course of business. In this case, the CEO was satisfied that the novelty replica tennis balls did not have substitutable goods produced in Australia, and thus, the TCO was made, granting these goods a free rate of duty instead of the general rate of 5%.
The application of this TCO is specific to the goods identified in the instrument and operates on a national level within Australia. The TCO applies to the entity that made the application, Amer Sports Australia Pty Ltd, and to any importers of the specified goods post the commencement date of the TCO, which is 05 July 2007. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth for actions taken before the TCO's registration. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties when accepting a TCO application; however, in this instance, no submissions were received. The scope of the TCO is further defined by the Customs Tariff Act 1995, which specifies the applicable duty rates.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0710499 pertain to the establishment of a tariff concession order (TCO) for certain novelty replica tennis balls. Section 269F of the Customs Act 1901 allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application does not relate to goods specified in section 269SJ, which outlines those goods that cannot be subject to a TCO, the CEO must then decide if the application meets the core criteria outlined in section 269C. Specifically, a TCO application meets these core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If satisfied, the CEO must make a written order, the TCO, declaring that the goods subject to the application are those to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by this Act on parties and entities involve several steps. Firstly, a party must submit an application to the CEO for a TCO, ensuring that it does not pertain to goods excluded by section 269SJ. The CEO must then evaluate whether the application meets the core criteria. If the CEO is satisfied that no substitutable goods were produced in Australia, they must issue a TCO. Additionally, the CEO must publish a notice in the Gazette, inviting any person who might object to the TCO to lodge a submission. These obligations are critical to ensuring the proper administration of tariff concessions.
The Act also delineates consequences for non-compliance. While the explanatory statement does not detail specific offences or penalties for breaches of the TCO, the Customs Act 1901 generally provides for a range of penalties for breaches of its provisions. These can include fines and imprisonment, with the exact penalties depending on the nature and severity of the breach. In cases where the TCO impacts duty refunds, failure to comply with the regulations governing such refunds could also result in financial penalties for the parties involved. It is important for all parties to adhere to the provisions of the TCO and the underlying Customs Act to avoid these potential consequences.