EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814216
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 Pty Ltd applied for a TCO in respect of certain night light sets on 24 June 2008.
Instrument
TCO No 0814216 was made on 08 September 2008. It declares that those certain night light sets 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. 0814216 is taken to have come into force on 24 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. 0814216, made under the Customs Act 1901, was enacted to provide a lower rate of customs duty on certain night light sets, in response to an application by The Reject Shop Pty Ltd. This legislation aims to address the issue of tariff concessions for goods that do not have Australian-made alternatives, thereby encouraging importation and potentially lowering consumer prices. The instrument was issued by the Chief Executive Officer of Customs, who, after verifying that the application met the core criteria, declared the specified night light sets to be exempt from the general duty rate of 5%, instead applying a free rate. The instrument was published in the Gazette with an invitation for objections, none of which were received. The Tariff Concession Order came into effect on the date the application was lodged, 24 June 2008, and it does not retroactively disadvantage any party nor impose new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0814216 applies to the specific goods, in this case certain night light sets, as identified in the application made by The Reject Shop Pty Ltd under section 269F of the Customs Act 1901. This Act applies to any person who meets the core criteria set out in section 269C of the Act, which pertains to the absence of substitutable goods produced in Australia at the time the application was lodged. The application process involves the Chief Executive Officer of Customs (CEO) assessing the application against the criteria and making a written order if satisfied, as outlined in section 269P(3). The scope of this legislation is national, falling under the Commonwealth jurisdiction, and it extends to any goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a Tariff Concession Order (TCO). The TCO in question was made under Schedule 4 of the Customs Tariff Act 1995, effectively reducing the duty on the specified goods from 5% to free, effective from the date the application was lodged, 24 June 2008. The TCO does not disadvantage any person or impose any liabilities in respect of actions taken before its registration, and it notably benefits importers who can apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The key operative sections of this legislation, specifically Instrument TCO No. 0814216, are sections 269C, 269B, 269E, and 269P(3) of the Customs Act 1901. Section 269C sets the core criteria for a Tariff Concession Order (TCO), which must be met for the order to be made. This requires that no substitutable goods were produced in Australia on the day the application was lodged. Section 269B defines "goods produced in Australia" and "ordinary course of business", while Section 269E defines "substitutable goods". If these criteria are met, Section 269P(3) mandates that the Chief Executive Officer (CEO) of Customs must make a written order, the TCO, declaring that the specified goods are subject to a lower rate of customs duty.
The Act imposes several obligations on the parties it governs. The CEO of Customs is required to assess whether a TCO application meets the core criteria as outlined in section 269C. If the application is deemed valid, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions opposing the TCO. Additionally, if the CEO decides to proceed with the TCO, they must ensure that the TCO does not adversely affect the rights of any person as at the date of registration. The TCO is also required to come into force on the day the application is lodged, as per section 269S(1) of the Act.
Under this legislation, there are no explicit offences, penalties, or civil/criminal consequences detailed for breach of the Act's provisions. However, the importance of compliance with the Act is underscored by the requirement for the CEO to rigorously assess TCO applications to ensure they meet the specified criteria. Failure to adhere to these criteria could result in the TCO not being granted, which would leave the goods subject to the general rate of duty rather than the concessional rate. While the Act does not specify maximum penalties for non-compliance, any failure to comply with the legislative requirements could lead to legal challenges and potential financial losses for the applicant if the TCO is subsequently revoked.