EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802719
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.
Bunnings Group Ltd applied for a TCO in respect of certain bags on 18 February 2008.
Instrument
TCO No 0802719 was made on 28 April 2008. It declares that those certain bags 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. 0802719 is taken to have come into force on 18 February 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, includes provisions for Tariff Concession Orders (TCOs) under Part XVA to facilitate reduced customs duties on certain goods. This legislative instrument was introduced to address the need for a streamlined process to apply for and obtain tariff concessions on specific goods, thereby encouraging trade and commerce by reducing the financial burden on importers. Specifically, TCO No. 0802719 was issued following an application by Bunnings Group Ltd for certain bags, which were granted a tariff concession effective from 18 February 2008, when the application was lodged. The policy objective is to ensure that tariff concessions are granted where no substitutable goods are produced in Australia, thereby supporting the importation of goods that are not domestically manufactured.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide lower rates of customs duty on specified goods. This Act applies to entities and individuals seeking to import goods that are not already produced in Australia in the ordinary course of business, as per the core criteria outlined in section 269C. The TCO scheme is applicable nationally across Australia and extends its benefits to importers of goods subject to the order, potentially enabling them to claim refunds of duty under the Customs Act Regulations. Notably, the TCO does not retroactively disadvantage or impose liabilities on any party other than the Commonwealth, safeguarding existing rights. The geographic reach of this Act is federal, encompassing the entire Commonwealth of Australia. Subordinate instruments may further detail or expand upon the application and scope of TCOs, ensuring flexibility and adaptability in addressing specific circumstances and industries.
Key Provisions
The main operative sections of this legislation pertain to the process of applying for and granting Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F outlines the application process, whereby a person may apply to the Chief Executive Officer of Customs (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, which excludes certain goods from TCO eligibility, the CEO must then decide if the application meets the core criteria as stipulated in section 269C. If the application meets these criteria, as per section 269P(3), the CEO must make a written order (TCO) specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, thus reducing the duty rate for these goods.
The obligations imposed by this Act on the parties it governs are primarily centred on the application and approval process for TCOs. The CEO must ensure that any TCO application not concerning goods specified in section 269SJ is evaluated against the core criteria in section 269C. This involves verifying that no substitutable goods were produced in Australia at the time of application, as defined by sections 269D and 269E. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit reasons why a TCO should not be granted. The CEO must also consider any submissions received in response to this notice.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly outline specific penalties for failing to comply with the TCO provisions. However, general provisions within the Act may apply, and any breaches of the Customs Act could lead to civil or criminal penalties. The specific consequences would depend on the nature and severity of the breach, but could include fines or imprisonment. It is important for entities and individuals to adhere to the stipulated processes and criteria to avoid potential legal repercussions.