EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720710
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.
Lemonbar Australia Pty Ltd applied for a TCO in respect of certain mobile vending cart on 05 December 2007.
Instrument
TCO No 0720710 was made on 29 February 2008. It declares that those certain mobile vending carts 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. 0720710 is taken to have come into force on 05 December 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. 0720710, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods, in this case, certain mobile vending carts. The Act, enacted by the Parliament of Australia, provides a mechanism through which the Chief Executive Officer of Customs can grant tariff concessions to applicants if certain criteria are met, such as the absence of substitutable goods being produced in Australia. The policy objective is to facilitate the importation of goods that are not domestically produced, thereby potentially reducing costs for importers and encouraging the use of imported goods where no suitable Australian-made alternatives exist. The instrument, which came into effect on 5 December 2007, ensures that the rights of importers are protected and that no existing liabilities are imposed retroactively.
Scope and Application
The Tariff Concession Instrument No. 0720710 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain mobile vending carts, which are granted a tariff concession order (TCO) by the Chief Executive Officer of Customs (CEO). The Act provides a framework for the CEO to assess and approve applications for TCOs, which allow for a lower rate of customs duty on the specified goods if certain conditions are met. The instrument specifically addresses applications from entities such as Lemonbar Australia Pty Ltd, which applied for the concession on 05 December 2007, and became effective on the same date. The CEO's decision to grant the concession was based on the absence of substitutable goods produced in Australia at the time the application was lodged. The TCO does not affect the rights of any person adversely and provides benefits to importers by allowing them to apply for a refund of duty on goods imported since the effective date of the concession. The Act's jurisdiction extends to the Commonwealth, and the application of the TCO is not restricted by any specified exclusions or exemptions within the text provided.
Key Provisions
The main operative sections of the Customs Act 1901, as applied in the Tariff Concession Instrument No. 0720710, include section 269F, which allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of specific goods. Section 269C outlines the core criteria for a TCO, specifically that on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. If these criteria are met, the CEO must issue a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995, with the applicable duty rate specified in the order (sections 269P(3) and 269S(1)).
The Act imposes several obligations on the parties involved. The CEO is required to ensure that the application for a TCO does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Furthermore, the CEO must determine whether the application meets the core criteria set out in section 269C. If the criteria are met, the CEO must proceed to make a TCO as per section 269P(3). Additionally, subsection 269K(1) mandates that the CEO publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, no submissions were received.
In terms of civil and criminal consequences, the explanatory statement does not specify any particular offences under the Customs Act 1901 for failing to comply with the requirements of a TCO. However, general provisions of the Act may apply to breaches of customs regulations, which could lead to penalties. The maximum penalties for offences under the Customs Act 1901 can include substantial fines and, in some cases, imprisonment, depending on the severity of the breach. These penalties are not explicitly detailed in the explanatory statement but are inherent in the broader legislative framework.