EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720910
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.
American Express Wholesale Currency Services applied for a TCO in respect of certain travellers cheques on 05 December 2007.
Instrument
TCO No 0720910 was made on 29 February 2008. It declares that those certain travellers cheques 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. 0720910 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. 0720910, enacted in 2008, is an amendment to the Customs Act 1901, designed to address the need for tariff concessions on specific goods. The Customs Act 1901 establishes a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs), which provide for lower rates of customs duty on certain goods. This instrument was introduced to provide a mechanism for applying for tariff concessions and ensuring that such applications are assessed against specific criteria to determine eligibility. The instrument aims to facilitate the process by which certain imported goods, such as those specified in the application by American Express Wholesale Currency Services for travellers cheques, can benefit from reduced duty rates, thereby enhancing trade efficiency and economic benefits for importers.
The instrument was enacted by the relevant legislature to ensure that the process for applying for and granting tariff concessions is transparent and fair. The policy objective is to allow for the concession of tariffs on goods that meet the specified criteria, ensuring that no substitutable goods are produced in Australia, thereby protecting domestic industries while also providing relief to importers. The instrument ensures that the application process includes an opportunity for public consultation, enhancing the legitimacy and acceptance of the tariff decisions made by the CEO.
Scope and Application
The Tariff Concession Instrument No. 0720910 applies to the specific category of travellers cheques for which American Express Wholesale Currency Services applied under Part XVA of the Customs Act 1901. This Act empowers the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that lower the rate of customs duty on goods, provided certain criteria are met. This particular TCO applies to those travellers cheques for which no substitutable goods are produced in Australia, thereby meeting the core criteria specified in the Act. The geographic reach of this Act is national, as it pertains to the Australian Customs framework and its application is governed by federal law. The TCO itself does not impose any new liabilities on individuals or entities and does not affect any pre-existing rights or obligations except to the benefit of importers who may now claim a refund of duty on goods imported since the TCO is deemed to have come into effect on 5 December 2007. The Act may also extend its application through subordinate instruments, such as regulations that further detail the procedures and eligibility for TCOs.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0720910 (the Instrument) under the Customs Act 1901 (the Act) pertain to the establishment of a Tariff Concession Order (TCO). Section 269F (2) enables a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in relation to specific goods, provided these goods are not listed in section 269SJ of the Act. If the CEO is satisfied that the application does not involve goods specified in section 269SJ and meets the core criteria outlined in section 269C, the CEO is mandated to issue a TCO. The Instrument, TCO No. 0720910, declares that certain travellers cheques are subject to a TCO, meaning they are exempt from the general duty rate of 5% and instead are subject to a rate of duty that is free.
The Act imposes several obligations and requirements on the parties involved. Firstly, the CEO must ensure that the application for a TCO complies with the core criteria set out in section 269C. This entails verifying that no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties who may have objections to the TCO. The CEO did not receive any submissions in response to the notice for TCO No. 0720910.
Any breach of the conditions or requirements stipulated by the Act may result in various civil or criminal consequences. For instance, non-compliance with the TCO's conditions could lead to the imposition of duties that would have been avoided had the TCO been correctly applied. The Act does not explicitly state the penalties for such breaches, but it is implied that the general legal framework governing customs duties and tariffs would apply. Consequently, penalties could include fines or other sanctions as prescribed by the applicable laws.
The commencement of a TCO, as stipulated in subsection 269S(1), is effective from the date the application for the TCO was lodged. For TCO No. 0720910, this means it came into force on 05 December 2007. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not disadvantage any person or impose liabilities on them in respect of actions taken before the TCO's registration date.