EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0715911
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.
The Reject Shop Pty Ltd applied for a TCO in respect of certain picnic rugs on 21 September 2007.
Instrument
TCO No 0715911 was made on 30 November 2007. It declares that those certain picnic rugs 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 10%. 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. 0715911 is taken to have come into force on 21 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the imposition of customs duties on imported goods. One particular issue the Act addresses is the potential for unfairly high duties on goods that have no domestic equivalent. To address this, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders allow for a lower rate of customs duty on goods that meet specific criteria, such as the absence of substitutable goods produced in Australia. This legislative framework ensures that Australian consumers are not subjected to unnecessarily high duties on goods that could be produced domestically, thereby encouraging fair competition and economic efficiency. The policy objective is to support the efficient allocation of resources within the economy by preventing excessive tariffs on goods that could be domestically produced.
Scope and Application
The Tariff Concession Instrument No. 0715911 under the Customs Act 1901 applies to goods for which a Tariff Concession Order (TCO) is made, specifically to certain picnic rugs in this instance. The Act allows for the reduction of customs duty on particular goods if the Chief Executive Officer of Customs determines that no substitutable goods are produced in Australia. The scope of the Act includes any entity or individual who imports goods eligible for a TCO, thereby directly impacting the importation industry. The TCO’s application is national in scope, governed by the Commonwealth, and is not limited by state or territory boundaries. Notably, the Act excludes goods specified in section 269SJ from being subject to a TCO, which includes goods that are typically produced within Australia. The application of the Act can be further extended or restricted through subordinate instruments, although the primary focus remains on ensuring that the import of specific goods is facilitated without imposing undue burdens or liabilities on non-Commonwealth entities.
Key Provisions
The key operative sections of the Customs Act 1901, as applied to Tariff Concession Orders (TCOs), include sections 269C, 269F, 269P, and 269SJ. Section 269F permits an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C specifies the core criteria that must be met for an application to be considered, which is contingent upon there being no substitutable goods produced in Australia in the ordinary course of business on the date the application is lodged. Section 269P(3) mandates that if the CEO determines the application meets the core criteria, a written order must be made, effectively granting the tariff concession. Section 269SJ outlines the goods that cannot be subject to a TCO.
The obligations and requirements imposed by the Customs Act 1901 on parties and entities governed by it include ensuring that any application for a TCO is made in accordance with the legislative framework. The CEO is required to review the application and assess whether it meets the core criteria as outlined in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted. Furthermore, the CEO must consider any submissions received and make a written order if the application meets the criteria.
Breaches of the provisions in the Customs Act 1901 can lead to various civil and criminal consequences. For instance, if an entity provides false information in an application for a TCO, this could be considered a misleading or deceptive conduct under Australian Consumer Law, potentially resulting in penalties. Additionally, any attempt to circumvent the application process by submitting a TCO for goods explicitly prohibited under section 269SJ could lead to enforcement actions, fines, or other penalties as deemed appropriate by the relevant authorities. The exact penalties are not specified in the explanatory statement but would typically align with the broader regulatory framework governing customs and trade practices in Australia.
In summary, the Customs Act 1901 provides a structured process for the granting of tariff concessions through TCOs, with specific obligations for applicants and the CEO. Non-compliance with these provisions can result in serious consequences, including civil and possibly criminal penalties, depending on the nature and severity of the breach. The Act ensures that the process is transparent and fair, while also protecting the rights of importers who may benefit from the tariff concessions granted.