EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0813164
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.
Global Shop Direct applied for a TCO in respect of certain computerised smart garden on 17 June 2008.
Instrument
TCO No 0813164 was made on 08 September 2008. It declares that those certain computerised smart garden 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. 0813164 is taken to have come into force on 17 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 Tariff Concession Instrument No. 0813164, enacted in 2008 under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods by establishing a process through which businesses can apply for lower rates of customs duty. This instrument was created to ensure that goods which are not substitutable by Australian-produced goods can receive a tariff concession if no such substitutable goods are produced domestically. The instrument was introduced by the Chief Executive Officer of Customs in accordance with the Act and aims to facilitate trade by reducing the cost of importing certain goods, thereby encouraging their availability in the market. The policy objective is to ensure that businesses can benefit from lower customs duties on goods for which there are no suitable Australian alternatives, thus supporting economic activity and consumer choice.
Scope and Application
The Tariff Concession Instrument No. 0813164 under the Customs Act 1901 applies to the concession of customs duty rates for certain computerised smart gardens. The instrument was enacted following an application by Global Shop Direct on 17 June 2008 and came into force on the same date. The application was processed by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia, thus meeting the core criteria stipulated under section 269C of the Act. The instrument exempts these specific smart gardens from the general duty rate of 5%, applying a zero duty rate instead. This concession is limited to the goods specified in the application and does not affect the rights of any person adversely or impose any new liabilities, as per subsection 269S(1) of the Act. The scope of the instrument is confined to the Commonwealth jurisdiction, and its implementation does not extend to state or territory laws. The CEO published a notice inviting submissions in the Gazette, but no objections were received, leading to the issuance of the Tariff Concession Order.
Key Provisions
The Tariff Concession Instrument No. 0813164 under the Customs Act 1901 (the Act) pertains to the granting of a Tariff Concession Order (TCO) for certain computerised smart gardens. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO is satisfied that the application does not concern goods specified in section 269SJ of the Act, which lists goods ineligible for a TCO, the CEO must assess whether the application meets the core criteria outlined in section 269C. Specifically, the application meets these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F of the Act, respectively.
The obligations imposed on the parties by this Act include the requirement for the CEO to assess whether an application meets the core criteria for a TCO, which involves verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Furthermore, as per subsection 269K(1) of the Act, the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In the case of TCO No. 0813164, the CEO did not receive any submissions in response to this invitation.
In terms of penalties and consequences, the Act does not explicitly state any offences or penalties for breaches related to the issuance of TCOs. However, any failure to comply with the requirements for applying for and receiving a TCO could potentially result in the CEO not granting the concession, thereby leaving the applicant subject to the general rate of duty rather than the concession rate. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on individuals or entities. Importers of the affected goods can apply for a refund of duty under paragraph 126(1)(r) of the Regulations for goods imported since the TCO is taken to have come into force, which in this case is 17 June 2008.