EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0807295
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.
Sperling Enterprises Pty Ltd applied for a TCO in respect of certain lumbar support cushions on 09 May 2008.
Instrument
TCO No 0807295 was made on 01 August 2008. It declares that those certain lumbar support cushions 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 7.5%. 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. 0807295 is taken to have come into force on 09 May 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. 0807295, enacted in 2008, is an instrument made under the Customs Act 1901, designed to provide tariff concessions for certain goods. This instrument was introduced to address the need for streamlined customs duty concessions for specific imported goods, ensuring that such concessions are granted in a manner that is transparent and accessible to applicants. The instrument was enacted by the Parliament of Australia, aiming to facilitate the import of goods by reducing customs duty rates under certain conditions, thereby promoting trade efficiency and benefiting importers by allowing them to apply for duty refunds on eligible goods imported since the effective date of the concession.
The instrument was issued following an application by Sperling Enterprises Pty Ltd for a Tariff Concession Order (TCO) concerning certain lumbar support cushions, which was accepted by the Chief Executive Officer of Customs. The CEO determined that no substitutable goods were produced in Australia, meeting the core criteria for a TCO. Consequently, the instrument declares that the specified lumbar support cushions are subject to a free rate of duty, as opposed to the general rate of 7.5%. This instrument effectively came into force on the date the application was lodged, 09 May 2008, without retroactively affecting any pre-existing rights or imposing new liabilities on persons other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower customs duty rates on specified goods. A TCO applies to goods for which an application has been made and approved by the CEO, provided the goods do not fall under the exclusions outlined in section 269SJ of the Act. The application process requires the CEO to assess whether the goods are substitutable by any Australian-produced items, with the definition of "substitutable goods" found in section 269D and "ordinary course of business" in section 269E. If the CEO determines that no substitutable goods are produced in Australia, the core criteria set out in section 269C are met, and a TCO is issued. The scope of the TCO extends to all relevant goods from the date the application is lodged, as stipulated in subsection 269S(1) of the Act. This particular TCO, number 0807295, pertains to certain lumbar support cushions and was published in the Gazette with no objections received, thereby affirming its validity and applicability. The TCO ensures that the rights of existing parties are protected, particularly benefiting importers who can apply for duty refunds on goods imported since the effective date of the TCO, which is the date the application was lodged.
Key Provisions
The main operative sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCOs) include sections 269F, 269C, 269B, 269D, 269E, 269P(3), and 269K(1). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application meets the core criteria set out in sections 269C and 269B, the CEO must make a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies (section 269P(3)). Additionally, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The Act imposes several obligations on parties or entities it governs. Firstly, the CEO must assess whether an application for a TCO meets the core criteria by determining if no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Substitutable goods are defined as those produced in Australia that are put, or are capable of being put, to a use that corresponds with a use to which the goods in question can be put (sections 269B and 269D). If the application meets the core criteria, the CEO must make a written TCO order (section 269P(3)). Furthermore, the CEO is required to publish a notice in the Gazette inviting submissions from the public regarding the application (section 269K(1)).
There are no specific offences, penalties, or civil/criminal consequences outlined in the explanatory statement for breaches of the Tariff Concession Orders. However, the Customs Act 1901 generally provides for penalties and enforcement actions for breaches of customs-related laws. For example, under the Customs Act, an offence of evading customs duty can attract a penalty of up to 10 years imprisonment, a fine of up to 120,000 penalty units (AUD 24.4 million as of October 2023), or both, for an individual, and higher penalties for a body corporate. The Act also provides for the recovery of unpaid duty and interest, and other civil remedies.