EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803039
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.
Sperling Enterprises Pty Ltd applied for a TCO in respect of certain car seat protector on 22 February 2008.
Instrument
TCO No 0803039 was made on 09 May 2008. It declares that those certain car seat protectors 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 7.5%. 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. 0803039 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. The Act includes provisions for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. This legislative instrument, Tariff Concession Instrument No. 0803039, was introduced to address the issue of applying tariff concessions to specific goods where there are no substitutable goods produced domestically. The instrument came into force on 22 February 2008, following an application by Sperling Enterprises Pty Ltd for tariff concessions on certain car seat protectors, which were granted a zero rate of duty as no equivalent goods were produced in Australia. The policy objective behind this concession is to encourage the import of goods where there is no local production, thereby benefiting importers and potentially enhancing market competition.
Scope and Application
The Tariff Concession Instrument No. 0803039, which operates under the Customs Act 1901, applies to entities or individuals seeking a tariff concession on specific goods, in this case, certain car seat protectors. The instrument specifically caters to those who have applied for and qualified for a Tariff Concession Order (TCO), which reduces the customs duty on the specified goods. This instrument is a Commonwealth initiative, applying nationally within the scope of the Customs Act and the Customs Tariff Act 1995. The TCO in question, which was made on 9 May 2008, exempts the specified car seat protectors from the usual customs duty, thereby allowing them to be imported free of charge. The instrument excludes any goods that are listed in section 269SJ of the Act, which details those goods ineligible for tariff concessions. The TCO's application is effective from the date the application was lodged, 22 February 2008, and does not retroactively affect any pre-existing rights or liabilities, ensuring that only future transactions benefit from the reduced tariff rates.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0803039 under the Customs Act 1901, as detailed in the explanatory statement, involve the application and processing of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (sections 269F, 269C, 269P). Section 269F allows for an application to the CEO for a TCO in respect of goods, while section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged (section 269D and 269E define "goods produced in Australia" and "ordinary course of business" respectively). If the CEO is satisfied that the application meets these criteria, a written order (a TCO) must be made (section 269P(3)). The instrument in question, TCO No. 0803039, was made on 9 May 2008 and applies to certain car seat protectors, declaring them as goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies (item 50), resulting in a duty-free rate on these goods.
The Customs Act 1901 imposes several obligations on the parties involved in the process of obtaining a TCO. The applicant, such as Sperling Enterprises Pty Ltd in this case, must ensure that the application is valid and meets the core criteria specified in section 269C. The CEO has the duty to assess the application against these criteria and make a decision based on whether substitutable goods were produced in Australia on the day the application was lodged. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although in this instance, no submissions were received (subsection 269K(1)). The CEO is also responsible for ensuring that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
In terms of the potential consequences for breach, the explanatory statement does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the requirements of the TCO or the Customs Act 1901. However, it is implied that any failure to adhere to the provisions could result in legal repercussions. The Customs Act 1901, as a comprehensive piece of legislation, likely contains various provisions that address non-compliance, including potential fines, penalties, or other legal actions that could be taken against entities or individuals who breach the Act’s requirements. Although the maximum penalties are not stated in the explanatory statement, it is reasonable to infer that penalties could be significant given the regulatory nature of the Act.