EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718731
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.
Tuscan Path Pty Ltd applied for a TCO in respect of certain polished pebbles on 8 November 2007.
Instrument
TCO No 0718731 was made on 29 January 2008. It declares that those certain polished pebbles 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. 0718731 is taken to have come into force on 8 November 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 was enacted to provide a framework for the regulation of customs and excise, including the imposition of duties on imported goods. The Tariff Concession Instrument No. 0718731, introduced in 2008, addresses the need to provide relief on customs duties for specific goods that are not produced in Australia, thereby encouraging the importation of such goods. The instrument was made by the Chief Executive Officer of Customs in accordance with the provisions of the Customs Act 1901, and it aims to ensure that no substitutable goods are produced domestically when tariff concessions are granted. The policy objective is to facilitate the importation of goods that are not produced locally, thus supporting industries that rely on the import of such goods and ultimately benefiting consumers by potentially lowering the cost of these goods.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) to reduce customs duties on specified goods. This applies to any individual or entity that meets the core criteria as outlined in the Act and seeks tariff concessions for goods not produced in Australia and for which no substitutable goods exist. The geographic reach of the Act is national, affecting all imports into Australia. The Act provides for exclusions, notably excluding certain goods from tariff concessions as specified in section 269SJ. Subordinate instruments may further extend or restrict the application of the Act by detailing specific conditions or additional criteria for tariff concessions. The CEO is mandated to consult publicly, inviting submissions on TCO applications, and the commencement of a TCO is effective from the date the application is lodged. The issuance of TCO No. 0718731, effective from 8 November 2007, demonstrates the Act’s application in granting free duty on certain polished pebbles, thereby benefiting importers while ensuring no pre-existing rights or liabilities of non-Commonwealth persons are adversely affected.
Key Provisions
The Tariff Concession Instrument No. 0718731 under the Customs Act 1901 (section 269F) permits the Chief Executive Officer of Customs (CEO) to grant tariff concession orders (TCO) to lower the rate of customs duty for specific goods. In this case, Tuscan Path Pty Ltd applied for a TCO for certain polished pebbles, which was granted on 29 January 2008. The CEO must ensure that the application meets core criteria, including that no substitutable goods were produced in Australia on the date of application (section 269C). The TCO allows for these pebbles to be subject to a duty rate of 0% under item 50 of Schedule 4 of the Customs Tariff Act 1995, rather than the general rate of 5%.
The Act imposes several obligations on parties applying for a TCO. The CEO must assess whether the application meets the core criteria, which involves confirming that no substitutable goods are produced in Australia. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made (section 269K). This ensures transparency and provides an opportunity for consultation. In this instance, no submissions were received by the CEO in response to the notice.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. While the explanatory statement does not specify criminal offences or penalties, it is clear that the Act allows for the imposition of penalties for breaches. The exact nature and severity of these penalties are not detailed in the explanatory statement, but they would typically include fines and possibly other civil or administrative actions for non-compliance with the terms of a TCO or failure to meet the requirements of the Act. The Act ensures that the rights of non-Commonwealth persons are not adversely affected by the TCO, and it does not impose any new liabilities on any party (section 269S).