EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803037
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.
NSW Leather Co Pty Ltd applied for a TCO in respect of certain bovine tanned furskins on 22 February 2008.
Instrument
TCO No 0803037 was made on 02 May 2008. It declares that those certain bovine tanned furskins 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. 0803037 is taken to have come into force on 22 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, establishes a framework for the administration of customs and excise duties. This Act allows for the creation of Tariff Concession Orders (TCOs) which can reduce the customs duty on specific goods under certain conditions. This legislative instrument, F2008L01791, was introduced to address the need for tariff concessions on particular imported goods, aiming to support industries that lack local production capabilities. In this case, the instrument specifically grants a tariff concession on bovine tanned furskins, reducing the duty from 5% to free, upon the application of NSW Leather Co Pty Ltd. The policy objective here is to provide relief to importers by lowering the duty on goods that are not produced domestically, thereby potentially enhancing competitiveness and encouraging trade.
The instrument was created following the application by NSW Leather Co Pty Ltd, which sought a concession for certain bovine tanned furskins. The Chief Executive Officer of Customs assessed the application against the criteria set out in the Customs Act 1901 and determined that no substitutable goods were produced in Australia. Consequently, TCO No. 0803037 was issued, effective from 22 February 2008. This concession is intended to benefit importers by allowing them to apply for a refund of duty on these goods imported since the effective date of the TCO. No submissions were received in opposition to this concession, indicating broad support or acceptance of the measure within the industry.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) which apply a reduced rate of customs duty to certain goods. This process is initiated when a person applies to the CEO for a TCO in respect of specific goods, provided those goods are not listed in section 269SJ of the Act, which excludes certain goods from TCO eligibility. For an application to meet the core criteria, it must be demonstrated that no substitutable goods were produced in Australia at the time of application, as per sections 269C and 269D of the Act. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, effectively applying a lower duty rate on the specified goods, as seen in TCO No. 0803037 concerning bovine tanned furskins. The Act ensures that the TCO does not retroactively disadvantage any person or impose liabilities for actions taken before its registration, thereby safeguarding the rights of importers who can apply for duty refunds for goods imported since the TCO's effective date.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0803037, provide for the making of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. This allows for a lower rate of customs duty to apply to goods that are the subject of a TCO, provided that certain criteria are met. According to section 269C, a TCO application is deemed to meet the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the Chief Executive Officer of Customs (CEO) is satisfied that these criteria are met, they must make a written order declaring the goods to which the concession applies (section 269P(3)).
The Act imposes several obligations and requirements on the parties involved. For instance, a person seeking a TCO must apply to the CEO in accordance with section 269F. The CEO must then determine whether the application meets the core criteria, which involves ensuring that no substitutable goods were produced in Australia at the time the application was lodged, as defined by section 269C. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. This ensures transparency and allows for potential objections to be considered before the TCO is made.
The legislation also outlines consequences for non-compliance or breach. Although specific offences and penalties are not detailed in the provided text, the Customs Act 1901 and related regulations likely impose civil or criminal penalties for violations. These penalties may include fines or imprisonment, depending on the nature and severity of the breach. The Customs Act 1901, in conjunction with the Customs Tariff Act 1995, would provide further details on the specific penalties applicable to breaches related to TCOs.