EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0721866
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.
Neptune Sports Pty Ltd applied for a TCO in respect of certain looped pile fabrics on 20 December 2007.
Instrument
TCO No 0721866 was made on 14 March 2008. It declares that those certain looped pile fabrics 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 10%. 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. 0721866 is taken to have come into force on 20 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, enacted by the Australian Parliament, provides a framework for the administration of customs duties and other import charges. This legislation aims to facilitate trade and protect Australian industry by allowing the government to regulate the importation of goods through tariffs and concession orders. The Customs Act 1901 was amended to include Tariff Concession Orders (TCOs) under section 269C, enabling the Chief Executive Officer of Customs to grant concessions on customs duties for specified goods if certain criteria are met. The problem or gap this legislation addresses is the need for a mechanism to provide relief from customs duties for goods that are not produced domestically and for which there are no suitable substitutes available in the Australian market. This helps to ensure that Australian consumers and businesses have access to a range of competitively priced goods, while also protecting local industries from unfair competition.
Scope and Application
The Customs Act 1901, specifically through Part XVA, governs the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any entity or individual that seeks to import goods eligible for a tariff concession under the Act. Such concessions reduce the customs duty on specified goods, provided the applicant meets the criteria outlined in section 269C. The TCOs are applicable to goods that are not produced in Australia in the ordinary course of business, and for which there are no substitutable goods as defined in section 269D. These concessions extend across the Commonwealth of Australia, affecting importers who can benefit from reduced duty rates on certain goods. However, goods specified in section 269SJ of the Act, which cannot be subject to a TCO, are excluded from this scheme. The application of the Act can also be extended or restricted through subordinate instruments, although the primary legislation itself does not specify these details. The TCOs are effective from the date the application is lodged, as per subsection 269S(1), and do not retroactively disadvantage any person or impose liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The main operative sections of the Customs Act 1901, specifically in relation to Tariff Concession Orders (TCOs), are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for goods, provided the goods are not specified in section 269SJ. The CEO must then determine whether the application meets the core criteria under section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the date the application was lodged. If the CEO is satisfied that the application meets the criteria, they must make a written TCO as per section 269P, which declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The Act imposes several obligations and requirements on the parties involved. The CEO of Customs is required to assess the validity of the TCO application, ensuring that it meets the core criteria and does not relate to goods that cannot be subject to a TCO under section 269SJ. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted as valid under subsection 269K(1). Additionally, any TCO made must not disadvantage any person other than the Commonwealth and must not impose liabilities in respect of actions taken before the TCO's registration date, as stipulated in subsection 269S(1).
Failure to comply with the provisions of the Act can result in various consequences. Although the explanatory statement does not detail specific offences or penalties, it is implied that non-compliance with the Act’s requirements could lead to legal action. The CEO might face scrutiny or legal challenges if they fail to properly assess TCO applications or if they improperly issue TCOs that do not meet the statutory criteria. The Act's framework ensures that any person adversely affected by a TCO can potentially seek legal remedies, although the specific penalties or consequences for non-compliance are not explicitly stated in this explanatory statement.