EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0716882
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 Limited applied for a TCO in respect of certain pet droppings clean up sets on 05 October 2007.
Instrument
TCO No 0716882 was made on 14 December 2007. It declares that those certain pet droppings clean up sets 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. 0716882 is taken to have come into force on 05 October 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. 0716882 was enacted under the Customs Act 1901, aiming to address the need for tariff concessions for specific imported goods where no substitutable domestic products are produced. This instrument was introduced by the Chief Executive Officer of Customs, who has the authority to make Tariff Concession Orders (TCOs) under section 269F of the Act. The Reject Shop Limited applied for this TCO on 5 October 2007 concerning certain pet droppings cleanup sets, and it was granted on 14 December 2007 after it was determined that no substitutable goods were being produced in Australia. This concession effectively reduces the duty on these goods from the general rate of 5% to zero, benefiting importers who can now apply for a refund of duty for imports since the effective date of the TCO, which is also 5 October 2007. The process followed by the CEO in handling this application included a public notice in the Gazette inviting objections, none of which were received.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislative framework allows for the application of a lower rate of customs duty on goods specified in a TCO, subject to certain criteria being met. The Act applies to any individual or entity that applies for a TCO, provided the goods in question are not specified in section 269SJ of the Act as ineligible for tariff concessions. The geographic and jurisdictional reach of this legislation is national, as it pertains to the Commonwealth of Australia and its customs duties. The Act also allows for the creation of subordinate instruments to extend or restrict the application of TCOs, thereby providing flexibility in managing tariff concessions. Notably, the Act excludes certain goods from TCO eligibility, and it ensures that the implementation of a TCO does not disadvantage any person other than the Commonwealth or impose liabilities on such persons for actions taken prior to the TCO’s registration.
Key Provisions
The Tariff Concession Order No. 0716882, pursuant to sections 269C and 269P(3) of the Customs Act 1901, declares that the certain pet droppings clean up sets are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, as determined by the Chief Executive Officer of Customs (CEO). This decision was made on the basis that no substitutable goods were produced in Australia, as required by section 269C. Consequently, the general rate of duty on these goods, which is 5%, is waived for the goods subject to this Tariff Concession Order (TCO). The order came into force on 05 October 2007, the day on which the application for the TCO was lodged, in accordance with subsection 269S(1) of the Customs Act 1901.
The obligations imposed by this legislation on parties and entities include the requirement for any person wishing to apply for a TCO to submit an application to the CEO, as outlined in section 269F of the Customs Act 1901. The CEO is then tasked with determining whether the application meets the core criteria specified in section 269C, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might have reasons why the TCO should not be made, as per subsection 269K(1) of the Act. This ensures transparency and provides an opportunity for stakeholders to voice their concerns.
Breaching the conditions or failing to comply with the requirements set out in the Customs Act 1901 can lead to various civil and criminal consequences. The Act does not explicitly detail specific penalties for non-compliance with the TCO provisions. However, general penalties for breaches of the Customs Act 1901 can include fines and imprisonment. The exact penalties would depend on the specific nature and severity of the breach. It is also important to note that the TCO itself does not impose any liabilities on any person, as stated in the explanatory statement, thereby protecting individuals from any disadvantage or additional burdens arising from the concession order.