EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803213
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.
Dck Australia Pty Ltd applied for a TCO in respect of certain imitation jewellery on 11 April 2008.
Instrument
TCO No 0803213 was made on 09 October 2008. It declares that those certain imitation jewellery 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. 0803213 is taken to have come into force on 11 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, as supplemented by Tariff Concession Instrument No. 0803213 enacted in 2008, aims to provide tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to reduce customs duty rates on items that meet certain criteria. The Act, enacted by the Australian Parliament, facilitates a streamlined process for businesses to apply for reduced tariff rates on goods, provided these goods are not already being produced in Australia in the ordinary course of business and are not listed in the restricted section of the Act. This legislative measure addresses the need for a more flexible customs duty regime that can respond to the economic demands of businesses by reducing the financial burden of importing goods that are not locally manufactured.
The explanatory statement for Instrument No. 0803213 indicates that Dck Australia Pty Ltd applied for and was granted a tariff concession on certain imitation jewellery, resulting in a reduction of the customs duty rate from the general 5% to free. This concession was made after it was determined that no substitutable goods were being produced in Australia at the time of application. The instrument came into effect on the date of the application, 11 April 2008, and does not affect any pre-existing rights or impose any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0803213, made under Part XVA of the Customs Act 1901, applies to goods for which a Tariff Concession Order (TCO) has been granted, specifically targeting certain imitation jewellery in this instance. The instrument allows for a concession in customs duty rates for these goods, reducing the duty from a general rate of 5% to free, provided the application for a TCO meets certain core criteria as outlined in the Act. The application for such a concession must be made by a person to the Chief Executive Officer of Customs, who must be satisfied that no substitutable goods are produced in Australia in the ordinary course of business, a condition stipulated in section 269C of the Act. Once a TCO is made, it affects the rights of importers beneficially, allowing them to apply for a refund of duty paid on goods imported since the date the TCO is taken to have come into force. The instrument is effective from the date the application for the TCO was lodged, in this case, 11 April 2008, and does not impose any liabilities on any person other than the Commonwealth.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0803213, under the Customs Act 1901, include sections 269C, 269P, and 269S (subsection 269S(1)). Section 269C specifies the core criteria for a Tariff Concession Order (TCO), which must be met for the Chief Executive Officer of Customs (CEO) to grant the concession. Section 269P outlines the CEO's obligation to make a written order if the application meets these criteria, and section 269S(1) details the commencement date of the TCO, which is the day on which the application was lodged.
Under these provisions, the CEO has the authority to issue a TCO for certain imitation jewellery, declaring that these goods are subject to a lower rate of customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. The CEO must ensure that the application meets the core criteria, which include verifying that no substitutable goods were produced in Australia on the day the application was lodged. Once the CEO is satisfied with these criteria, they must issue the TCO, which declares the specific tariff treatment of the goods.
The obligations imposed by the Act on the parties governed by the TCO include the requirement for the CEO to review and assess the validity of TCO applications against the core criteria (section 269C). The CEO must also publish a notice in the Gazette inviting any interested parties to submit objections or reasons why the TCO should not be made (subsection 269K(1)). Additionally, the CEO must ensure that the TCO does not impose any liabilities on any person other than the Commonwealth and does not affect any rights as at the date of registration in a way that disadvantages any person or imposes liabilities in respect of actions taken before the registration date (subsection 269S(1)).
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach in the context of the TCO. However, the failure to comply with the statutory requirements for issuing a TCO, such as not meeting the core criteria or not publishing the required notice in the Gazette, could lead to administrative or judicial review. Importers may also seek a refund of duty on goods imported since the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. In cases where the TCO application is found to be invalid or improperly issued, the CEO may be required to revoke the TCO, and any benefits granted may be subject to clawback or re-evaluation.