EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0802929
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.
OPC Ergonomics Pty Ltd applied for a TCO in respect of certain document holders on 19 February 2008.
Instrument
TCO No 0802929 was made on 28 April 2008. It declares that those certain document holders 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. 0802929 is taken to have come into force on 19 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 Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs) under Part XVA. These TCOs are designed to apply lower rates of customs duty to specific goods when certain criteria are met, thereby promoting trade and supporting industries by reducing the cost of imported goods. The policy objective is to provide relief to Australian producers and importers by making certain goods more competitively priced in the domestic market. The explanatory statement outlines that Tariff Concession Instrument No. 0802929 was introduced to address a specific application by OPC Ergonomics Pty Ltd for reduced customs duties on certain document holders. The Chief Executive Officer of Customs determined that no substitutable goods were being produced in Australia, thereby meeting the core criteria for a TCO. This instrument effectively reduces the duty rate from the general 5% to free, commencing from the date the application was lodged, 19 February 2008.
Scope and Application
The Tariff Concession Instrument No. 0802929, issued under the Customs Act 1901, applies to entities or individuals who have applied for a Tariff Concession Order (TCO) for specific goods, in this case, certain document holders, and those who import these goods into Australia. The Act facilitates the application process for tariff concessions and specifies that the CEO of Customs must assess whether the application meets the core criteria, which includes verifying that no substitutable goods are produced in Australia. If the criteria are satisfied, a TCO is issued, granting a lower rate of customs duty on the specified goods, in this instance, reducing the duty from the general rate of 5% to free. The instrument is applicable nationally across Australia, as it falls under the Commonwealth jurisdiction. Exclusions are noted in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The TCO's commencement is retroactive to the date of the application, meaning that from 19 February 2008, the date the application was lodged, the tariff concession was in effect, benefiting importers by allowing them to apply for a refund of duty on goods imported since that date.
Key Provisions
The key operative sections of this legislation (F2008L01902) under the Customs Act 1901 involve the creation and implementation of Tariff Concession Orders (TCOs). Specifically, section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning particular goods. If the CEO is satisfied that the application is valid and does not pertain to goods specified in section 269SJ, the CEO must then decide if the application meets the core criteria outlined in section 269C. If these criteria are met, the CEO must issue a written TCO (section 269P(3)), which is detailed in TCO No. 0802929 for certain document holders.
The obligations imposed by the Act include the requirement for the CEO to publish a notice in the Gazette once an application is accepted as valid (subsection 269K(1)). This notice invites any interested party to lodge a submission if they believe there are reasons why the TCO should not proceed. Additionally, the TCO must specify that the new duty rate applies from the date the application was lodged (subsection 269S(1)). The CEO must also ensure that the TCO does not disadvantage any person (other than the Commonwealth) or impose any liabilities on them in relation to actions taken prior to the TCO's registration.
In terms of potential consequences for non-compliance, while the explanatory statement does not explicitly mention specific offences, penalties, or civil/criminal consequences for breaching the Act's provisions, it is implicit that failure to adhere to the stipulated processes and criteria for issuing a TCO could lead to legal challenges or disputes. Any such breaches might be addressed under broader provisions of the Customs Act 1901 or related legislation, potentially resulting in penalties as prescribed by law. However, the maximum penalties are not specified in the text provided.