EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804286
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.
Super Cheap Auto Pty Ltd applied for a TCO in respect of certain boat covers on 15 April 2008.
Instrument
TCO No 0804286 was made on 11 July 2008. It declares that those certain boat covers 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. 0804286 is taken to have come into force on 15 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, enacted by the Australian Parliament, facilitates the establishment of Tariff Concession Orders (TCOs) under Part XVA, which provide lower rates of customs duty on specified goods. This legislative framework was introduced to address the need for streamlined and efficient customs processes that support trade by reducing the financial burden on businesses that import certain goods not produced in Australia. TCOs are issued by the Chief Executive Officer of Customs upon meeting core criteria, including the absence of substitutable goods produced domestically. The policy objective of this legislative mechanism is to encourage trade by making imported goods more affordable, thus benefiting importers and potentially stimulating economic activity. Instrument TCO No. 0804286, enacted on 11 July 2008, is an example of this process, providing a tariff concession for specific boat covers, reducing the duty from 5% to free, effective from the date of application on 15 April 2008.
Scope and Application
The Tariff Concession Instrument No. 0804286, made under the Customs Act 1901, applies to individuals and entities seeking a tariff concession on imported goods, specifically boat covers in this instance. The instrument was created in response to an application by Super Cheap Auto Pty Ltd and is applicable from the date of the application, 15 April 2008. The instrument operates by reducing the customs duty rate on certain boat covers from the general rate of 5% to zero, provided that the CEO of Customs is satisfied that no substitutable goods are produced in Australia. The instrument is part of the broader scheme under section 269F of the Act, which allows for the application of tariff concessions to goods not specified in section 269SJ of the Act. This concession applies nationally across Australia, impacting importers who may now benefit from a reduction in duty rates on the specified goods. The rights of any person importing these goods will be positively affected, allowing for duty refunds under the Customs Act, while ensuring that no liabilities are imposed on any person in respect of actions taken prior to the instrument’s registration.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework for Tariff Concession Orders (TCOs) through Part XVA, which allows the Chief Executive Officer of Customs (CEO) to reduce customs duty on specified goods (section 269F). When an applicant submits a TCO application, the CEO must first ensure the goods are not listed in section 269SJ, which includes goods that are prohibited from TCOs. If the goods pass this initial check, the CEO then assesses whether the application meets the core criteria outlined in section 269C. This requires confirmation that, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of these terms are provided in sections 269D (goods produced in Australia), 269E (ordinary course of business) and 269F (substitutable goods).
The obligations imposed by the Act on parties involved include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application (subsection 269K(1)). This notice invites any person who believes the TCO should not be made to lodge a submission with the CEO. In this case, no submissions were received in response to the published notice. Furthermore, a TCO is deemed to come into effect on the day the application is lodged (subsection 269S(1)). This ensures that the reduced duty rate applies from the date of application. The TCO also does not affect any rights of a person (other than the Commonwealth) as at the date of registration, nor does it impose any liabilities on a person in respect of anything done or omitted before the date of registration (subsection 269S(4)).
For any breach of the provisions within the Customs Act 1901, the Act includes various offences, penalties, and consequences. The maximum penalties for non-compliance can be significant and may include fines and imprisonment, depending on the nature and severity of the offence. However, the specific offences, penalties, and consequences related to TCOs are not detailed in the provided text. It is important to note that while the Act aims to facilitate tariff concessions, it also includes stringent measures to ensure compliance and to prevent abuse of the system.