EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0803926
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.
The Reject Shop Limited applied for a TCO in respect of certain utility tubs on 11 March 2008.
Instrument
TCO No 0803926 was made on 30 May 2008. It declares that those certain utility tubs 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. 0803926 is taken to have come into force on 11 March 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. 0803926 was enacted in 2008 under the authority of the Customs Act 1901 to address the need for tariff concessions on specific goods, ensuring that Australian businesses can compete effectively in the market by reducing the cost of imported goods. The instrument was developed in response to an application from The Reject Shop Limited for tariff concessions on certain utility tubs. The primary objective of this legislation is to facilitate the importation of these goods at a lower rate of customs duty, thereby promoting economic efficiency and consumer benefit. The enactment of this instrument by the Chief Executive Officer of Customs was conducted in accordance with the provisions of the Customs Act, and no objections were raised during the consultation period, indicating broad acceptance of the measure's intent and impact.
Scope and Application
The Tariff Concession Instrument No. 0803926 applies to the concession of customs duty on certain utility tubs, as requested by The Reject Shop Limited. This instrument falls under the Customs Act 1901, which allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply a lower rate of customs duty to specified goods. The application of the TCO is contingent upon the CEO's satisfaction that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The scope of this instrument is limited to the specified utility tubs and the entities involved in their importation, which will benefit from a reduction in duty from the general rate of 5% to a duty-free status as a result of this TCO. The instrument is effective from the date of the application, 11 March 2008, and does not disadvantage any person other than the Commonwealth, nor impose any liabilities on persons other than the Commonwealth for actions taken before the registration of the TCO.
Key Provisions
The Customs Act 1901, specifically Part XVA, outlines the framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows any person to apply to the CEO for a TCO concerning specific goods. If the CEO is convinced that the application does not pertain to goods prohibited under section 269SJ, the CEO must assess whether the application fulfills the core criteria (section 269C). This assessment involves determining whether, on the date the application was lodged, any substitutable goods were produced in Australia in the ordinary course of business. If the CEO confirms that no such substitutable goods were produced, a TCO is warranted.
Under the Act, a TCO application satisfies the core criteria if, on the day it was submitted, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of these terms are provided by sections 269D, 269E, and 269F respectively. In the case of The Reject Shop Limited's application for certain utility tubs, the CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria. Consequently, TCO No 0803926 was issued on 30 May 2008, declaring that these utility tubs are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the rate of duty set at free instead of the general 5% rate.
The obligations imposed by the Act on parties and entities primarily involve the application process and the CEO's responsibilities. Upon receiving a valid application, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be granted. This was done for The Reject Shop Limited's application, but no submissions were received. The CEO must then decide whether to issue a TCO based on the assessment of the application against the core criteria. Once a TCO is issued, it takes effect from the date the application was lodged, as stated in section 269S(1) of the Act. In this instance, TCO No 0803926 is deemed to have come into force on 11 March 2008.
Breaching the provisions of the Customs Act 1901, particularly in the context of TCOs, can lead to various legal consequences. While the explanatory statement does not detail specific offences, penalties, or civil/criminal consequences for breach under the Act, it is known that the Act provides for enforcement mechanisms to ensure compliance. The Act includes provisions for fines and imprisonment for serious breaches, although the exact penalties would be determined by the courts. The Act also allows for the recovery of duties and penalties, as well as the imposition of additional administrative fees. The rights of importers are protected, and they can apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any liabilities on any person, as explicitly stated in the explanatory statement.