EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0814474
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.
Moffat Pty Ltd applied for a TCO in respect of certain stainless steel bratt pants on 25 June 2008.
Instrument
TCO No 0814474 was made on 12 September 2008. It declares that those certain stainless steel bratt pants 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. 0814474 is taken to have come into force on 25 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. 0814474, enacted in 2008 under the Customs Act 1901, addresses the need for a streamlined process to apply for tariff concessions on specific goods, thereby facilitating more efficient trade practices. The instrument was introduced to allow for the application of lower rates of customs duty on certain goods, in this case, stainless steel bratt pants, provided that no substitutable goods were produced in Australia at the time of the application. The process involves the Chief Executive Officer of Customs (CEO) assessing whether the application meets core criteria, such as the non-existence of substitutable goods in Australia, before making a written order declaring the applicable tariff. This mechanism ensures that the application of tariff concessions is both fair and economically beneficial, particularly for importers who can now claim refunds for duties paid on such goods since the effective date of the concession.
The instrument was developed and enacted by the Australian Parliament to provide a clear and transparent process for applying tariff concessions. The policy objective behind this legislation is to support the efficient operation of the Australian customs system by enabling the CEO to make informed decisions on tariff concessions, thereby promoting trade while ensuring that Australian industries are not unduly disadvantaged. This legislative framework is designed to maintain a balance between supporting Australian production and facilitating the import of goods that are either not produced locally or have a negligible local production.
Scope and Application
The Tariff Concession Instrument No. 0814474 applies to certain stainless steel bratt pants, which are specified goods subject to a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901. This Act allows the Chief Executive Officer of Customs (CEO) to grant TCOs that reduce the customs duty rate on eligible goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application in question was made by Moffat Pty Ltd on 25 June 2008, and the TCO was issued on 12 September 2008, with a retrospective commencement date of 25 June 2008. The geographic reach of this legislation is national, as it falls under the Commonwealth’s purview, and it specifically benefits importers by allowing them to apply for duty refunds on imports of the specified goods from the date the TCO is deemed to have come into force. The TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on any person in respect of actions taken before the TCO’s effective date. The scope of the Act is further defined by the exclusion of goods specified in section 269SJ of the Customs Act, which cannot be subject to a TCO.
Key Provisions
The primary operative sections of the Customs Act 1901, as modified by Tariff Concession Instrument No. 0814474, include sections 269C, 269B, 269E, 269F, 269P, and 269S. These sections establish the framework for applying for and receiving a Tariff Concession Order (TCO) for certain goods. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO. If the application meets the core criteria set out in section 269C—namely, that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged—the CEO must grant the TCO. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must issue a written TCO. This order specifies that the goods in question are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995, which defines the applicable duty rate.
The Customs Act 1901 imposes several obligations on the CEO when processing TCO applications. Upon receiving an application, the CEO must determine if it complies with the core criteria, particularly verifying that no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO must promptly issue a written TCO. Additionally, as per subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO within a specified period. Failure to publish such a notice or consider any objections received would constitute a procedural breach.
Violating the provisions of the Customs Act 1901 or the terms of a TCO may lead to civil or criminal consequences. While the explanatory statement does not detail specific penalties for breaching the Act, general provisions under Australian law typically include fines and potential imprisonment for serious offences. The maximum penalties would depend on the nature and severity of the breach, with more significant penalties applying to wilful or repeated violations. Importers and other stakeholders must ensure compliance with the Act and any TCOs to avoid these adverse consequences.