EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716254
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.
Target Australia Pty Ltd applied for a TCO in respect of certain kitchen utensils on 25 September 2007.
Instrument
TCO No 0716254 was made on 07 December 2007. It declares that those certain kitchen utensils 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. 0716254 is taken to have come into force on 25 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 Commonwealth Parliament, establishes a framework for the regulation of customs and excise duties in Australia. The Act provides mechanisms for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) under Part XVA, which apply lower rates of customs duty to specific goods. This legislative instrument aims to address the problem of imposing unnecessary tariffs on goods where no substitutable products are produced domestically, thereby encouraging trade and reducing costs for businesses and consumers. The explanatory statement for Tariff Concession Instrument No. 0716254, published on 7 December 2007, indicates that the instrument was introduced to grant a TCO for certain kitchen utensils, reducing their customs duty from 5% to free, based on the CEO's determination that no substitutable goods were produced in Australia. The instrument took effect from 25 September 2007, the date the application was lodged, and no submissions were received in opposition to the TCO.
Scope and Application
The Tariff Concession Instrument No. 0716254, issued under Part XVA of the Customs Act 1901, applies to the application and processing of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) for specific goods. This legislation is pertinent to any person or entity applying for a tariff concession in respect of goods that are not specified in section 269SJ of the Act, which lists those goods ineligible for TCOs. The Act ensures that if the CEO determines that no substitutable goods are produced in Australia, and if the application meets the core criteria outlined in section 269C, a TCO can be issued, effectively reducing or eliminating customs duty on the specified goods. This instrument has a national reach as it pertains to the Commonwealth level, with its application extending across Australia. There are no stated exclusions, exemptions, or thresholds beyond those already specified in the Customs Act 1901 and related sections. The CEO is mandated to publish notices in the Gazette to invite submissions on TCO applications, although in this instance, no submissions were received. The TCO in question, which came into force on the date of application, does not retroactively affect any rights or impose liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0716254 under the Customs Act 1901 (section 269F) detail the process for applying for a Tariff Concession Order (TCO) and the criteria that must be met. Section 269C stipulates that an application for a TCO will be considered if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269D, 269E and 269F define key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods'. If the Chief Executive Officer of Customs (CEO) determines that these criteria are met, they must issue a written TCO (section 269P(3)), which reduces the customs duty on the specified goods.
The obligations imposed by the Act on the parties involved include the requirement for applicants to ensure their goods meet the core criteria set out in section 269C. The CEO has the obligation to process applications and make a decision based on whether the core criteria are met, as outlined in section 269F. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO is obligated to consider any submissions received before making a final decision.
Failure to comply with the requirements of the Act can result in several consequences. Although the explanatory statement does not specify any criminal penalties for breaches, it is likely that serious breaches could be subject to the general penalties outlined in the Customs Act 1901, which may include fines and imprisonment. For civil penalties, the Act does not specify a maximum penalty, but any financial losses resulting from non-compliance, such as overpaid duties that are not refunded, would need to be addressed according to the general principles of civil law. Furthermore, the rights of importers will be beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).