EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0712496
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.
Rehab Assist Pty Ltd applied for a TCO in respect of certain swivel cushions on 06 August 2007.
Instrument
TCO No 0712496 was made on 12 October 2007. It declares that those certain swivel cushions 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 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. 0712496 is taken to have come into force on 06 August 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, includes provisions for Tariff Concession Orders (TCOs) to provide reduced customs duty rates on certain goods under specific conditions. This was introduced to address the need for tariff concessions that would encourage the importation of goods not produced domestically, thereby potentially lowering costs for consumers and businesses. The policy objective is to stimulate competition and innovation by allowing the import of goods that are not locally manufactured, which can lead to economic benefits such as lower prices and increased variety in the marketplace. The Tariff Concession Instrument No. 0712496, made on 12 October 2007, exemplifies this legislative intent by granting a tariff concession on certain swivel cushions, reducing their duty rate from 7.5% to free, effective from 6 August 2007. The instrument was enacted without any submissions against the concession, ensuring a smooth process aligned with the Act's requirements.
Scope and Application
The Customs Act 1901 applies to individuals and entities involved in the importation of goods into Australia, particularly those seeking tariff concessions. This Act allows the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) to reduce customs duty on specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of this Act is national, covering the entire Commonwealth of Australia, and it is primarily concerned with the conduct of importing goods and the transactions associated with these imports. The Act does not apply to goods listed in section 269SJ, which are ineligible for tariff concessions. The TCO, once issued, applies retroactively to the date of the application, meaning the tariff concessions are effective from the date the application was lodged. Any subsequent refunds for duties paid on the goods can be claimed from the date the TCO was effectively applied. The application and scope of the Act can be extended through subordinate instruments, which may include regulations and further orders made under the authority of the Customs Act 1901.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0712496 are sections 269C, 269B, 269D, 269E, 269P, and 269S of the Customs Act 1901. These sections collectively establish the criteria for the application and implementation of a Tariff Concession Order (TCO). Specifically, section 269C sets the core criteria that an application must meet, such as ensuring no substitutable goods are produced in Australia. Section 269B defines terms like 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. Section 269P(3) mandates the CEO to issue a TCO if the criteria are met, and section 269S specifies the effective date of the TCO, which is the date the application was lodged.
The Act imposes specific obligations on parties seeking a TCO. An applicant must submit an application to the CEO, ensuring it complies with the stipulated criteria in section 269C. The CEO, upon receiving a valid application, is required to publish a notice in the Gazette inviting any interested parties to submit submissions opposing the TCO. If no objections are received, the CEO must proceed to make the TCO as per section 269P(3). The Act also mandates that the CEO consider the definitions of 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' as outlined in sections 269B, 269D, and 269E.
There are no specific offences or penalties mentioned in the explanatory statement for breaching the provisions of the Tariff Concession Instrument No. 0712496. However, any misuse or circumvention of the TCO regulations could potentially lead to legal consequences under broader customs and trade laws. The Act ensures that the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's effective date. The rights of importers are beneficially affected, and they can apply for a refund of duty on goods imported since the TCO's effective date under the Regulations.