EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714833
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.
Dats Pty Ltd applied for a TCO in respect of certain plastic pet carriers on 12 September 2007.
Instrument
TCO No 0714833 was made on 23 November 2007. It declares that those certain plastic pet carriers 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. 0714833 is taken to have come into force on 12 September 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. 0714833 was introduced in 2007 under the Customs Act 1901 to address the need for tariff concessions for specific goods that are not produced domestically. The instrument, enacted by the Parliament of Australia, facilitates the granting of lower customs duty rates on imported goods that do not have domestic substitutes, thereby encouraging the importation of goods that are not locally manufactured. This legislative measure aims to enhance the competitiveness of imported goods in the Australian market, which in turn benefits consumers by potentially reducing the cost of these goods. The Customs Act 1901, as amended, provides the framework for the Chief Executive Officer of Customs to assess and approve tariff concession orders based on defined criteria, ensuring that the concessions are granted appropriately and without adversely affecting the rights of non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0714833 applies to Dats Pty Ltd in its capacity as the applicant for a Tariff Concession Order (TCO) concerning certain plastic pet carriers. The legislation in question stems from Part XVA of the Customs Act 1901, which empowers the Chief Executive Officer of Customs to grant TCOs that provide for reduced rates of customs duty on specified goods. The primary focus of this legislation is on the eligibility of goods for tariff concessions and the procedural requirements for applying and approving such concessions. The application of this legislation is geographically and jurisdictionally confined to the Commonwealth of Australia, operating under the authority granted by the Customs Act 1901. The Act does not explicitly exclude certain entities or industries but does outline conditions that must be met for a TCO to be granted, including the absence of substitutable goods produced in Australia at the time of application. The exclusions are primarily centred around goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The Act allows for the extension or restriction of its application through subordinate instruments, such as regulations, which may provide further detail on the procedures and criteria for TCO applications.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) as it pertains to Tariff Concession Orders (TCOs) include sections 269F, 269S, 269C, and 269P. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided the goods do not fall under the exclusions specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria, outlined in sections 269C and 269P, the CEO is mandated to make a written order (a TCO) declaring that the goods are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995. This instrument, TCO No. 0714833, specifies that certain plastic pet carriers are subject to a duty rate of free, down from the general rate of 5%.
The Act imposes specific obligations and requirements on both the applicant and the CEO. Dats Pty Ltd, as the applicant, must ensure that their application for a TCO adheres to the criteria set out in section 269C, which necessitates that no substitutable goods are produced in Australia on the day the application is lodged. The CEO, on receiving a valid application, must publish a notice in the Gazette, as required by section 269K(1), inviting any interested party to lodge submissions if they believe the TCO should not be granted. Furthermore, under section 269S(1), the TCO is considered effective from the date the application was lodged, in this case, 12 September 2007.
In terms of offences and penalties, the Act does not explicitly outline specific penalties for breaches related to TCOs. However, any breach of the Customs Act or associated regulations may result in civil or criminal penalties. These can include fines, imprisonment, or both, depending on the severity of the breach. For instance, under the Crimes Act 1914, wilful contravention of the Customs Act could lead to fines up to 10,000 penalty units or imprisonment for up to five years, or both. Additionally, the Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, nor are they imposed with new liabilities.