EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718062
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.
Super Cheap Auto applied for a TCO in respect of certain picnic rugs on 23 October 2007.
Instrument
TCO No 0718062 was made on 18 January 2008. 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. 0718062 is taken to have come into force on 23 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 Customs Act 1901, enacted by the Parliament of Australia, provides for a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This Act aims to address the need for providing tariff concessions on certain imported goods under specific conditions. The 2008 Tariff Concession Instrument No. 0718062 was introduced to provide a tariff concession for certain picnic rugs, allowing them to be imported at a lower rate of customs duty than the general rate. The CEO of Customs was satisfied that no substitutable goods were produced in Australia, meeting the core criteria set out in the Act. Consequently, the CEO made a written order, TCO No. 0718062, declaring that these picnic rugs are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 10%. This instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force on 23 October 2007.
Scope and Application
The Customs Act 1901, specifically Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person or entity seeking a concession on the customs duty payable on goods imported into Australia. The scope of this legislation extends to any goods that are not specified in section 269SJ of the Act, which lists goods ineligible for a TCO. The Act's application is national, covering all territories under the Commonwealth of Australia, as it is an Act of the Parliament of Australia. The Act stipulates that a TCO can only be granted if no substitutable goods are produced in Australia in the ordinary course of business. In cases where the CEO determines that the application for a TCO meets the core criteria, a written order is issued, applying a specified tariff rate from the Customs Tariff Act 1995. The legislation allows for the CEO to make decisions based on subordinate instruments which define terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods'. The commencement of a TCO is effective from the date the application is lodged, with the TCO not disadvantaging any person or imposing liabilities on any person in relation to actions taken before the TCO's registration.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0718062 (the Instrument) under the Customs Act 1901 (the Act) involve the creation of Tariff Concession Orders (TCOs). Specifically, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. If the CEO is satisfied that the application is valid and meets the core criteria, as outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a specified lower rate of customs duty. For example, TCO No. 0718062, made on 18 January 2008, applies to certain picnic rugs, reducing their duty from 10% to free, as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations and requirements on the parties involved. Firstly, under section 269K(1), the CEO must publish a notice in the Gazette once a TCO application is accepted as valid. This notice must invite any person who believes the TCO should not be granted to lodge a submission with the CEO. Additionally, the CEO must determine whether the application meets the core criteria, specifically ensuring, under section 269C, that no substitutable goods were produced in Australia on the day the application was lodged. Substitutable goods are defined in section 269D as goods produced in Australia that can be used for the same purpose as the goods in question. If these conditions are met, the CEO must issue a TCO under section 269P(3).
The Act also outlines consequences for non-compliance. While the explanatory statement does not detail specific offences or penalties for breaching the Act or the Instrument, it is generally understood that failure to adhere to the provisions regarding TCO applications could result in legal actions. The penalties for such breaches might include fines or other civil or criminal sanctions as stipulated under the relevant sections of the Customs Act 1901 or any other applicable legislation. The exact penalties would depend on the specific nature and severity of the breach.
The Instrument provides that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, ensuring that no one is disadvantaged or imposed liabilities for actions taken before the TCO's effective date. This means that the TCO will not retroactively impose any financial burdens or alter existing legal rights. Importers of the affected goods can benefit from the lower duty rate and may apply for a refund of any duties paid since the TCO's effective date, as outlined in paragraph 126(1)(r) of the Regulations.