EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0719789
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.
Hunter Leisure Pty Ltd applied for a TCO in respect of certain printed balls on 19 November 2007.
Instrument
TCO No 0719789 was made on 8 February 2008. It declares that those certain printed balls 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. 0719789 is taken to have come into force on 19 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 peron 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 Australian Parliament, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). This legislation was introduced to address the need for a system that allows for the reduction of customs duties on specific goods, ensuring that such concessions do not undermine domestic production. The act specifically outlines criteria for determining when a TCO can be granted, such as the non-existence of substitutable goods produced in Australia at the time of application. In the case of Hunter Leisure Pty Ltd, the CEO issued TCO No. 0719789 for certain printed balls, following a successful application on 19 November 2007. This instrument, effective from the date of application, provides a zero duty rate on these goods, reducing the general duty rate from 5% to free. The CEO ensured transparency and public participation by publishing a notice in the Gazette, inviting submissions on the proposed concession, although none were received in this instance. The policy objective of the TCO scheme is to provide tariff relief while safeguarding domestic industry from undue competition.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) which the Chief Executive Officer of Customs (CEO) can implement to apply lower rates of customs duty on certain goods. This Act applies to individuals or entities that apply for a TCO in relation to goods that are not specified in section 269SJ of the Act as ineligible for concession. The application process requires that, on the day of submission, there are no substitutable goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D. The scope of this legislation is national, as it pertains to the Commonwealth level, affecting all states and territories within Australia. Exclusions include goods specified in section 269SJ, and the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons against the concession before a decision is made. The TCOs can also be extended or restricted through subordinate instruments, and in this particular case, TCO No. 0719789 concerning certain printed balls was made effective from 19 November 2007, the date the application was lodged.
Key Provisions
The Tariff Concession Instrument No. 0719789 is a legislative tool within the Customs Act 1901, specifically under Part XVA, which allows the Chief Executive Officer (CEO) of Customs to grant tariff concession orders (TCOs) for certain goods (s. 269F). These orders lower the rate of customs duty for the specified goods. The operative sections of the Act, such as sections 269C, 269B, and 269D, define the criteria for a TCO application, including the requirement that no substitutable goods are produced in Australia at the time of application. When these criteria are met, the CEO is mandated to issue a written TCO (s. 269P(3)), as demonstrated in the case of Hunter Leisure Pty Ltd’s application for certain printed balls on 19 November 2007, which resulted in TCO No. 0719789 on 8 February 2008. This TCO effectively reduced the duty rate for these goods from the general 5% to free of charge.
The obligations imposed by the Act on the CEO and applicants are quite clear. The CEO must ensure that the application for a TCO does not pertain to goods specified in section 269SJ, which are ineligible for TCOs (s. 269F). Once an application is deemed valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be granted (s. 269K(1)). In this case, no submissions were received. The TCO, upon being made, must be published in the Gazette and is considered to have come into force on the date the application was lodged (s. 269S(1)). This ensures that the TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth (s. 269S(2)).
Breaches of the provisions set out in the Customs Act 1901 can result in both civil and criminal penalties. However, the explanatory statement does not detail specific offences or penalties related to TCOs. Generally, breaches of customs regulations can lead to fines and, in severe cases, imprisonment. For example, knowingly making a false statement to obtain a TCO could result in significant penalties. The exact penalties would depend on the nature and severity of the breach, but they can include substantial fines and imprisonment terms as stipulated under the broader customs legislation framework.