EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0804729
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 planter baskets on 27 March 2008.
Instrument
TCO No 0804729 was made on 06 June 2008. It declares that those certain planter baskets 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. 0804729 is taken to have come into force on 27 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. 0804729 was enacted in 2008 as part of the Customs Act 1901 to facilitate the application of tariff concessions on certain goods. This instrument was introduced to address the need for a streamlined process by which importers could apply for reduced customs duties on specific goods, provided no substitutable goods were produced in Australia. The instrument was made by the Chief Executive Officer of Customs in response to an application by The Reject Shop Limited for certain planter baskets, which were granted a tariff concession under item 50 of Schedule 4 to the Customs Tariff Act 1995. The general rate of duty on these goods was reduced from 5% to free, effective from the date the application was lodged, 27 March 2008. This instrument was published in the Gazette with an invitation for objections, none of which were received, thereby allowing the tariff concession to take effect without any imposed liabilities or disadvantages to persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0804729 under the Customs Act 1901 pertains to the granting of tariff concessions on specific goods, namely planter baskets, for which The Reject Shop Limited applied. The Act applies to any person or entity seeking to import goods that are eligible for a Tariff Concession Order (TCO). The geographic reach of this Act is national, as it involves the application and implementation of customs duties at a federal level, overseen by the Chief Executive Officer of Customs. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The process for granting a TCO requires that no substitutable goods are produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act. The application of this Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995 and related regulations, which further detail the criteria and conditions under which tariff concessions can be granted.
Key Provisions
The primary operative sections of this legislation include section 269F, which allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C outlines the core criteria that must be met for an application to be considered valid, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must make a written order under section 269P(3), which specifies the lower rate of duty applicable to the goods in question.
The Act imposes several obligations on the parties involved. The CEO is required to assess the validity of the application against the core criteria, and if satisfied, must proceed to make the TCO. The applicant, in this case, The Reject Shop Limited, must provide sufficient information to satisfy the CEO that the goods in question meet the criteria for a TCO. Additionally, under section 269K(1), the CEO is required to publish a notice in the Gazette, inviting any interested parties to submit any objections to the TCO. There were no submissions in response to the notice for TCO No. 0804729, indicating that no objections were raised.
The Act also includes provisions regarding offences and penalties for breaches. While the explanatory statement does not specify penalties for breaches related to TCOs, it is reasonable to infer that breaches of the Customs Act 1901, such as making false statements or evading duty, could result in significant penalties. Generally, under the Customs Act, offences can result in fines up to $22,200 for individuals and $111,000 for bodies corporate, with additional penalties for repeat or serious offences. Criminal penalties may also apply, including imprisonment terms that can extend depending on the severity and frequency of the offence. The TCO itself does not impose any liabilities on any person and does not affect the rights of a person (other than the Commonwealth) as at the date of registration.