EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0718999
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.
Bonza Buy Pty Ltd applied for a TCO in respect of certain solar ovens on 8 November 2007.
Instrument
TCO No 0718999 was made on 29 January 2008. It declares that those certain solar ovens 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. 0718999 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, enacted by the Parliament of Australia, provides a framework for the regulation of customs and excise. The Act was enacted to address the need for a structured approach to managing customs duties and tariffs, ensuring compliance and facilitating international trade. Specifically, Part XVA of the Act introduces the mechanism for Tariff Concession Orders (TCOs), which are intended to reduce customs duty on certain goods that are not produced in Australia or where no substitutable goods are produced domestically. The Tariff Concession Instrument No. 0718999, issued under this Act, aims to provide tariff concessions on specific solar ovens by Bonza Buy Pty Ltd, effective from 8 November 2007. This legislative instrument was introduced to provide a lower rate of customs duty on these goods, aligning with the policy objective of promoting the import and use of non-domestically produced items that have no suitable Australian alternatives.
Scope and Application
The Tariff Concession Instrument No. 0718999 applies to the particular solar ovens as declared under the Customs Act 1901, specifically concerning the concession of customs duty rates. The Act enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCO) for goods where certain criteria are met, such as the absence of substitutable goods produced in Australia at the time of the application. The TCO in question applies to Bonza Buy Pty Ltd’s application for these solar ovens, reducing their duty rate to free from the general rate of 5%. This legislative instrument extends to the Commonwealth jurisdiction, and it is applicable nationwide. The Act ensures that no existing rights of persons other than the Commonwealth are adversely affected by the issuance of the TCO, and it does not impose any liabilities on individuals or entities other than the Commonwealth. The TCO came into effect on the date the application was lodged, which was 8 November 2007, as per the commencement provisions of the Customs Act 1901. The process includes a requirement for public notice and potential submissions, although in this case, none were received.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269B, 269E, 269D, and 269P(3)) establish the framework for the creation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269C requires that the CEO must make a TCO if certain criteria are met, specifically if no substitutable goods are produced in Australia on the day the application was lodged. Sections 269B, 269E, and 269D provide definitions crucial to understanding the conditions for making a TCO, such as what constitutes "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) mandates that the CEO must issue a written order declaring the goods to which the prescribed tariff item applies if the application meets the core criteria.
The obligations imposed by the Customs Act 1901 on parties or entities it governs include the requirement for applicants to demonstrate that no substitutable goods are being produced in Australia at the time of application. The CEO has the obligation to review applications and, if the criteria are satisfied, to make a TCO. Additionally, the CEO must publish a notice in the Gazette inviting submissions on the application, as stipulated in section 269K(1). The TCO itself provides a lower rate of customs duty on the specified goods, benefiting importers by allowing them to apply for refunds of duty paid on those goods since the effective date of the TCO.
Offences or breaches of the provisions in the Customs Act 1901 can lead to civil or criminal consequences. However, the explanatory statement does not specify any particular offences or penalties directly related to the TCO. Generally, under the Customs Act, failure to comply with the Act can lead to penalties such as fines or imprisonment. The specific penalties would depend on the nature and severity of the breach, but they are not detailed in the explanatory statement provided. The Act ensures that the TCO does not disadvantage any person or impose liabilities in respect of actions taken before the TCO was registered.