EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0811916
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.
Gansel Australia Pty Limited applied for a TCO in respect of certain tackle box fishing kits on 10 June 2008.
Instrument
TCO No 0811916 was made on 15 August 2008. It declares that those certain tackle box fishing kits 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. 0811916 is taken to have come into force on 10 June 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 Parliament of Australia, provides for the imposition of customs duty on imported goods. This legislation includes provisions for Tariff Concession Orders (TCOs) that allow for reduced customs duty rates on certain imported goods, as outlined in Part XVA. This part of the Act was introduced to address the need for concessional tariffs on goods that are not produced domestically and for which there are no suitable substitutes. The policy objective is to facilitate the importation of goods that are not manufactured in Australia, thereby supporting consumer access and potentially encouraging domestic production of these goods over time. Tariff Concession Instrument No. 0811916 was made under this scheme, specifically for tackle box fishing kits, and took effect from the date the application was lodged, 10 June 2008. The instrument was published in the Gazette with an invitation for submissions, though none were received, and the concessional tariff rate was applied retroactively to the date of application.
Scope and Application
The Tariff Concession Instrument No. 0811916 under the Customs Act 1901 applies to specific goods, in this case, certain tackle box fishing kits. The application for a Tariff Concession Order (TCO) was made by Gansel Australia Pty Limited on 10 June 2008. The Act provides that the Chief Executive Officer of Customs (CEO) must assess whether the application meets the core criteria, specifically whether substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. If these criteria are satisfied, the CEO must issue a TCO, which in this instance, was done on 15 August 2008, applying a zero rate of duty on the specified goods. The geographic reach of this Act is national, as it applies across Australia and is managed under Commonwealth law. Exclusions from this TCO include goods specified in section 269SJ of the Act that cannot be subject to a TCO. Additionally, the TCO does not affect any rights or impose any liabilities on persons other than the Commonwealth in respect of actions taken before the TCO was registered.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). Section 269F allows for applications to be made for a TCO regarding certain goods, subject to the criteria set out in section 269C. If the CEO is satisfied that no substitutable goods are produced in Australia in the ordinary course of business, they must make a written order (section 269P(3)). For instance, TCO No. 0811916, made on 15 August 2008, declared that certain tackle box fishing kits would have a free rate of duty, as no substitutable goods were produced in Australia. This particular TCO came into force on the date of application, 10 June 2008, without affecting any existing rights or imposing new liabilities.
Under the Customs Act, entities such as Gansel Australia Pty Limited must ensure their applications for TCOs comply with the requirements outlined in section 269F. The CEO must then verify that the application meets the core criteria, including the absence of substitutable goods produced in Australia (section 269C). Furthermore, the CEO is mandated to publish a notice in the Gazette, inviting submissions from any interested parties who might have reasons why the TCO should not proceed (subsection 269K(1)). In the case of TCO No. 0811916, no submissions were received, leading to the issuance of the order.
The Act imposes specific obligations on the CEO, including the assessment of TCO applications against the core criteria and the publication of notices inviting public submissions. The CEO must also ensure that the issuance of a TCO does not disadvantage any person or impose liabilities for actions taken prior to the TCO's effective date. This ensures that the TCO's implementation is fair and does not retroactively affect existing rights or impose unforeseen liabilities on individuals or entities.
Breaching the provisions of the Customs Act can result in significant penalties. For example, knowingly making a false statement in an application for a TCO could lead to fines and imprisonment. The maximum penalties vary depending on the severity of the offence but may include substantial fines and imprisonment terms as stipulated under the relevant sections of the Act. These legal consequences underscore the importance of adhering to the legislative requirements and obligations set out in the Customs Act.