EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0714834
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 pet food bowls on 12 September 2007.
Instrument
TCO No 0714834 was made on 23 November 2007. It declares that those certain pet food bowls 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. 0714834 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. 0714834, enacted under the Customs Act 1901, was introduced to address the issue of tariff concessions for specific goods, ensuring they are not subject to customs duty if certain conditions are met. This instrument was made on 23 November 2007, following an application by Dats Pty Ltd for tariff concessions on certain pet food bowls, which were declared to be subject to a zero percent duty rate as no substitutable goods were produced in Australia at the time. The policy objective, as stated in the Act, is to facilitate the importation of goods for which there are no Australian-made equivalents, thereby supporting the importer’s rights to potentially claim refunds on duties already paid prior to the concession coming into effect. The instrument was subject to consultation as per section 269K(1) of the Act, although no submissions were received in response to the published notice in the Gazette.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), facilitates a scheme whereby the Chief Executive Officer of Customs may grant tariff concessions for certain imported goods. These concessions apply to goods for which no substitutable goods are produced in Australia in the ordinary course of business. The Act applies to any individual or entity that imports goods eligible for tariff concessions. The geographic reach of the Act extends nationally, as it is a Commonwealth law. However, certain goods specified in section 269SJ of the Act are excluded from tariff concessions, such as goods that are prohibited or restricted under other Commonwealth laws. The Act's application can be extended or restricted through subordinate instruments, but these do not alter the core criteria for granting tariff concessions. Once a TCO is granted, the concessions apply retroactively to the date the application was lodged, though they do not affect the rights of any person as at the date of registration to disadvantage them or impose liabilities for actions taken prior to the registration.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0714834, under the Customs Act 1901, focus on the creation and effect of Tariff Concession Orders (TCOs) (s 269C, s 269P). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods do not fall under the exclusions listed in section 269SJ. If the CEO is satisfied that the application meets the core criteria, notably that no substitutable goods were produced in Australia on the day the application was lodged (s 269C), the CEO must make a written order, a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (s 269P(3)). This TCO declares the goods to which a lower rate of customs duty applies, in this case, free of charge for certain pet food bowls.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs must ensure that any application for a TCO is assessed against the core criteria, primarily focusing on whether substitutable goods were produced in Australia on the date of application (s 269C). If the application meets these criteria, the CEO must publish a notice in the Gazette, inviting submissions from any interested parties who might have objections to the TCO being made (s 269K(1)). The TCO, once made, provides relief from the general customs duty rate and applies retroactively from the date the application for the TCO was lodged (s 269S(1)). Importers of the specified goods can apply for a refund of duties paid from the effective date of the TCO (Regulation 126(1)(r)).
Failure to comply with the requirements or conditions set forth in the Customs Act 1901 or the associated regulations can lead to significant consequences. While the explanatory statement does not specify detailed penalties, breaches of customs laws generally can result in both civil and criminal penalties. Civil penalties might include fines up to several thousand Australian dollars, depending on the severity and intent of the breach. Criminal penalties can be more severe, with potential imprisonment for offences involving fraud or deliberate contravention of customs laws. The exact penalties would be determined by the specific provisions of the Customs Act and any applicable regulations or subsidiary legislation.