EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0713412
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.
Bunnings Group Ltd applied for a TCO in respect of certain garden carts on 23 August 2007.
Instrument
TCO No 0713412 was made on 9 November 2007. It declares that those certain garden carts 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 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. 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. 0713412 is taken to have come into force on 23 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 Australian Parliament, includes provisions for Tariff Concession Orders (TCOs) under Part XVA, designed to address the need for lower rates of customs duty on specific imported goods. This was introduced to encourage the importation of goods where there is no Australian production equivalent, thus fostering competitive market practices. The policy objective is to ensure that goods which are not produced in Australia can be imported at a lower duty rate, thereby benefiting consumers and potentially encouraging local production in the long term. The Chief Executive Officer of Customs is empowered to make these orders upon receiving applications, provided they meet the stipulated core criteria and do not concern goods excluded under section 269SJ of the Act. The process involves publishing a notice in the Gazette to allow for any objections, which did not occur in the case of TCO No. 0713412 concerning certain garden carts. This TCO was made effective from the date the application was lodged, ensuring that no existing rights or liabilities of individuals or entities other than the Commonwealth were adversely affected.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislative instrument applies to any person or entity that wishes to apply for a TCO for goods they intend to import. The Act allows for reduced customs duty rates on goods that meet certain criteria, specifically when no substitutable goods are produced in Australia. A TCO can only be issued if the application adheres to the core criteria outlined in section 269C, which mandates that no substitutable goods must be produced in Australia in the ordinary course of business on the date the application is lodged. The scope of the legislation extends to the Commonwealth level, as it is enacted under federal law, thereby affecting all states and territories within Australia. The legislation does not specify exclusions or exemptions, but it does exclude goods listed in section 269SJ from being subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, which are typically regulations or orders made under the authority of the Act.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0713412, made under the Customs Act 1901, are sections 269C, 269F, and 269P. Section 269F (3) requires that a person can apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, provided that the goods are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, they must make a written order (section 269P(3)) declaring that the goods are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, thus reducing the rate of customs duty.
The obligations imposed by this Act on the parties governed by it include ensuring that any application for a TCO is made in accordance with the Act's provisions and is not in respect of goods specified in section 269SJ. The CEO is required to consider the application against the core criteria outlined in section 269C. If satisfied that the criteria are met, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also decide on the application within a reasonable timeframe and communicate the decision in writing.
Failure to comply with the requirements of the Act or breaches of the conditions of a TCO may result in civil or criminal penalties. While the Explanatory Statement does not detail specific offences or penalties, under the Customs Act 1901, breaches can lead to substantial fines and potential imprisonment. The exact penalties would depend on the nature and severity of the breach, as well as any relevant provisions in subsidiary legislation. For instance, fraudulent claims or misrepresentations could attract penalties under section 239 of the Act, which imposes fines and imprisonment for offences related to customs fraud.
Additionally, the Act ensures that the rights of a person (other than the Commonwealth) are not adversely affected by a TCO, as per subsection 269S(1). This means that the TCO does not impose any liabilities on any person for actions taken before the TCO was registered. Importers, however, can benefit from the TCO by applying for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations.