EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803231
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.
Blundstone Australia Pty Ltd applied for a TCO in respect of certain footwear moulds on 11 April 2008.
Instrument
TCO No 0803231 was made on 04 July 2008. It declares that those certain footwear moulds 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. 0803231 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 Tariff Concession Instrument No. 0803231, enacted in 2008, operates under the Customs Act 1901 to provide a framework for the granting of Tariff Concession Orders (TCOs). This legislation was introduced to address the need for a mechanism by which the Chief Executive Officer of Customs can provide relief from standard customs duties on certain goods, provided specific criteria are met. The enacting body is the Parliament of Australia, with the policy objective being to facilitate the import of goods that are not produced domestically, thereby potentially lowering costs and encouraging trade. This instrument particularly benefits importers by potentially reducing the duty payable on specified goods, as illustrated in the case of Blundstone Australia Pty Ltd's application for footwear moulds, where the duty rate was reduced to free, effective from the date the application was lodged.
Scope and Application
The Customs Act 1901, through Part XVA, provides the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to individuals or entities that wish to apply for a TCO to lower the customs duty on specific goods. The legislation specifically excludes certain goods from eligibility, as outlined in section 269SJ. The TCO applies to the Commonwealth, impacting the rates at which customs duties are levied on specified goods. The scope of the legislation is further defined through its subordinate instruments, such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to goods subject to a TCO. In this instance, Tariff Concession Instrument No. 0803231 applies to certain footwear moulds, reducing their customs duty from a general rate of 5% to free, effective from the date of the application, 11 April 2008. The legislation ensures that the rights of non-Commonwealth entities are not adversely affected by the issuance of a TCO, and it allows for the potential refund of duties paid on the specified goods before the TCO was registered.
Key Provisions
The Tariff Concession Order (TCO) No. 0803231, made under section 269F of the Customs Act 1901, pertains to the concession of customs duty for certain footwear moulds, as applied for by Blundone Australia Pty Ltd. The TCO was issued on 4 July 2008, following an application on 11 April 2008. The concession was granted because, on the date of the application, no substitutable goods were being produced in Australia, as required by section 269C of the Act. This means the footwear moulds in question were not being manufactured domestically, allowing for the tariff concession. Under this TCO, the general rate of duty, which would typically be 5%, is reduced to free for these specific goods, as outlined in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The TCO imposes specific obligations on the entities it governs. Firstly, it requires the Chief Executive Officer of Customs (CEO) to ensure that applications for TCOs meet the core criteria set forth in section 269C of the Act. If the CEO is satisfied that the application is valid and no substitutable goods are produced in Australia, they must make a written TCO order. Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit reasons why the TCO should not be made, as per subsection 269K(1) of the Act. In this instance, no submissions were received, leading to the issuance of the TCO.
There are no specific offences outlined in the legislation for breaching the TCO provisions, but the Act does provide for potential civil and criminal consequences for non-compliance with customs regulations generally. For example, section 286 of the Customs Act 1901 covers offences related to false statements and fraudulent conduct in relation to customs matters, with penalties that can include substantial fines or imprisonment. For the TCO itself, the primary consequence of non-compliance would be the imposition of the standard customs duty rate on the goods, rather than the concessional rate, unless the conditions for the TCO are met. It is also important to note that the TCO does not affect the rights of any person other than the Commonwealth, as outlined in subsection 269S(1) of the Act.