EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0720928
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.
Skyfit Pty Ltd applied for a TCO in respect of certain portable push up exercisers on 07 December 2007.
Instrument
TCO No 0720928 was made on 29 February 2008. It declares that those certain portable push up exercisers 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. 0720928 is taken to have come into force on 07 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 Customs Act 1901 was enacted to provide a framework for the regulation of customs and excise, including the imposition of duties and the control of goods entering and leaving Australia. The Act includes provisions for Tariff Concession Orders (TCOs), which are used to grant tariff concessions on certain goods. This mechanism was introduced to address the need for flexibility in the imposition of customs duties, allowing for reduced rates on specific goods under certain conditions. The Tariff Concession Instrument No. 0720928 was enacted by the Parliament of Australia, with the objective of facilitating trade by reducing the duty on certain portable push-up exercisers. This was achieved by declaring that these goods are subject to a lower rate of customs duty, thereby making them more competitively priced in the Australian market. The implementation of this TCO ensures that the rights of importers are protected and that no existing liabilities are imposed retroactively.
Scope and Application
The Tariff Concession Instrument No. 0720928, under the Customs Act 1901, applies to individuals or entities, such as Skyfit Pty Ltd, who apply for a Tariff Concession Order (TCO) concerning specific goods. The Act provides a mechanism whereby the Chief Executive Officer of Customs can grant a TCO to reduce the customs duty on certain goods if no substitutable goods are produced in Australia in the ordinary course of business. This applies to the particular goods that Skyfit Pty Ltd applied for, namely certain portable push-up exercisers, where the general rate of duty is reduced to free following the issuance of the TCO. The geographic reach of this Act is national, as it operates within the framework of the Customs Act 1901, which is a Commonwealth Act. However, the Act excludes certain goods as specified in section 269SJ, which cannot be subject to a TCO. The application of the Act may be extended or restricted through subordinate instruments, such as regulations or further orders under the Customs Act 1901.
Key Provisions
The key operative sections of this legislation detail the process and criteria for applying for and making Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods, provided those goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. Section 269C sets out the core criteria that a TCO application must meet, namely that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must make a written order (a TCO) under section 269P(3) that specifies the goods the TCO applies to.
The Act imposes several obligations and requirements on the parties involved in the TCO process. The CEO must assess the validity of an application under section 269F and determine whether it meets the core criteria set out in section 269C. If the application meets the criteria, the CEO must make a written TCO under section 269P(3). The CEO must also publish a notice in the Gazette inviting submissions on the application as soon as practicable after accepting it as valid under section 269K(1). The applicant must provide all necessary information and evidence to support their application.
The legislation outlines potential consequences for non-compliance. If a person breaches any of the provisions of the Customs Act 1901, they may face civil or criminal penalties, depending on the nature and severity of the breach. For example, section 255 of the Act provides for a maximum penalty of 5,000 penalty units for contravening certain provisions of the Act. The exact penalties for breach of the TCO provisions would depend on the specific breach and would be determined in accordance with the general penalty provisions of the Customs Act 1901.