EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0809125
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.
Enviro Balls Australia Pty Ltd applied for a TCO in respect of certain dryer balls on 21 May 2008.
Instrument
TCO No 0809125 was made on 01 August 2008. It declares that those certain dryer balls 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. 0809125 is taken to have come into force on 21 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 Order Instrument No. 0809125, enacted in 2008, is an instrument made under the Customs Act 1901, to facilitate tariff concessions on specific goods. This instrument was introduced to address the need for a streamlined process in applying for tariff concessions on goods that are not produced in Australia and for which no suitable substitutes are available domestically. The instrument was enacted by the Chief Executive Officer of Customs, in line with the provisions of the Customs Act 1901, which allows for the creation of Tariff Concession Orders (TCOs) to provide a lower rate of customs duty on goods. The primary policy objective is to ensure that Australian consumers and businesses have access to competitively priced imported goods by reducing the customs duty on items that are not produced locally and for which there is no suitable domestic substitute.
The Customs Act 1901, as amended, provides the legal framework for the creation of TCOs, and the instrument in question was introduced to provide tariff concessions on certain dryer balls. Enviro Balls Australia Pty Ltd applied for a TCO on these goods, and after meeting the core criteria outlined in the Act, the Chief Executive Officer of Customs issued TCO No. 0809125. This order declares that the certain dryer balls are subject to a zero rate of customs duty, as opposed to the general rate of 5%. The instrument came into force on 21 May 2008, the date on which the application was lodged. The TCO does not affect any existing rights or impose any liabilities on any person, other than the Commonwealth, in respect of actions taken before the registration date. Importers of these goods can apply for a refund of duty on goods imported since the commencement date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0809125 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain dryer balls, which are now subject to a tariff concession order (TCO). The Act allows for the reduction or exemption of customs duty on specific goods through the issuance of TCOs by the Chief Executive Officer of Customs (CEO). The scope of the legislation extends to any entity or individual involved in the importation of the specified goods, provided they meet the criteria outlined in the Act. The instrument is part of the broader scheme under Part XVA of the Customs Act 1901 and is subject to the conditions and definitions specified therein, including the absence of substitutable goods produced in Australia. The geographic reach of this legislation is national, as it operates under the federal jurisdiction of the Commonwealth of Australia. The TCO does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities. The CEO is required to consult with the public upon receiving a valid TCO application, although in this case, no submissions were received. The TCO is effective from the date the application was lodged, which is 21 May 2008, and the concession applies to imports of the specified goods from that date onwards.
Key Provisions
The Customs Act 1901 (section 269F) allows for the application for Tariff Concession Orders (TCOs) by any person to the Chief Executive Officer of Customs (CEO). If the CEO determines that the application pertains to goods not listed in section 269SJ, which prohibits certain goods from being subject to a TCO, the application must meet the core criteria outlined in section 269C. A TCO application meets these criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D, 269E, and 269F. If the CEO is satisfied that the application meets these criteria, a written TCO must be issued under section 269P(3), declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on the CEO include the responsibility to assess applications for TCOs against the specified criteria, and to make a TCO if the application meets these criteria. The CEO is also required, under subsection 269K(1), to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In the case of TCO No. 0809125, the CEO did not receive any submissions in response to the Gazette notice.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to TCO applications. However, the general legal framework under which the Customs Act operates would imply that any misuse or fraudulent application for a TCO could result in legal action. The penalties for such actions would depend on the specific nature of the breach and would be in accordance with the applicable laws and regulations.
In summary, the Customs Act 1901 provides a structured process for the application and issuance of TCOs, ensuring that the rights of all parties are protected, and that any concessions granted are fair and legally compliant. The Act ensures that the CEO has the necessary tools and obligations to manage these applications effectively while maintaining the integrity of the customs duty system.