EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802559
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.
Power Import & Distrubtion applied for a TCO in respect of certain table linen on 04 April 2008.
Instrument
TCO No 0802559 was made on 27 June 2008. It declares that those certain table linens 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. 0802559 is taken to have come into force on 04 April 2008.
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 Commonwealth Parliament, provides a framework for the imposition and collection of customs duties on imported goods. This Act facilitates the establishment of Tariff Concession Orders (TCOs) to provide tariff relief on certain goods, thereby addressing the gap in offering incentives for businesses to import specific items that are not domestically produced. The Tariff Concession Instrument No. 0802559, enacted on 27 June 2008, was created to provide a tariff concession for certain table linens, reducing their duty from 5% to free, reflecting the policy objective of supporting the importation of goods not produced domestically and benefiting importers by potentially allowing them to claim a refund of duty on imports made since the commencement date of the TCO.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which provide lower rates of customs duty on specified goods. This Act applies to any person or entity wishing to import goods that may be eligible for tariff concessions, provided these goods do not fall under the restricted list outlined in section 269SJ of the Act. The geographic reach of this legislation is national, as it pertains to imports into Australia. The Act mandates that applications for TCOs must meet certain criteria, such as the absence of substitutable goods produced in Australia, as defined by sections 269C, 269D, 269E, and 269F. Once a TCO is issued, it comes into effect on the date the application was lodged, with no retrospective effect on pre-existing rights or liabilities, except for the potential benefit of duty refunds for importers as per the Customs Tariff Regulations. This Act does not specify exclusions or thresholds beyond those stipulated within its sections and related regulations. The CEO's decisions on TCO applications are subject to consultation, which may include publishing notices in the Gazette and considering submissions from interested parties, though no submissions were received for TCO No. 0802559.
Key Provisions
The main operative sections of the Customs Act 1901 as it pertains to Tariff Concession Orders (TCOs) are sections 269C, 269F, 269K, 269P, and 269S. Section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. The CEO must then determine whether the application meets the core criteria set out in section 269C, which includes the requirement that no substitutable goods are produced in Australia in the ordinary course of business. Once the CEO is satisfied that the application meets the criteria, a TCO must be made under section 269P, and this is to be published in the Gazette under section 269K. A TCO is considered to have come into force on the day the application was lodged, as per section 269S.
The obligations imposed by the Customs Act 1901 on the parties governed by the Act include the requirement for applicants to ensure that their TCO applications meet the core criteria, which involves demonstrating that no substitutable goods are produced in Australia. The CEO of Customs has the obligation to assess applications against these criteria and to make a decision on whether to grant a TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the proposed TCO. Once a TCO is made, the CEO must ensure that it does not disadvantage any person other than the Commonwealth and does not impose any liabilities on such persons in respect of actions taken prior to the TCO's registration.
The Act also delineates consequences for breaches of its provisions. Although specific offences and penalties are not detailed within the explanatory statement, breaches of the Customs Act 1901 or associated regulations could potentially lead to civil or criminal penalties. Such penalties could include fines or imprisonment, depending on the nature and severity of the breach. The maximum penalties would be determined by the specific provisions of the Customs Act 1901 or the Customs Regulations 1993, and could vary widely based on the context of the breach.