EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0822710
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.
Aussie Outback Supplies applied for a TCO in respect of certain pvc laminated convertible bags on 23 July 2008.
Instrument
TCO No 0822710 was made on 17 October 2008. It declares that those certain pvc laminated convertible bags 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. 0822710 is taken to have come into force on 23 July 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 Australian Parliament, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs. This legislative framework was designed to address the need for tariff reductions on specific imported goods, promoting economic efficiency and competitiveness by ensuring that Australian consumers and businesses have access to goods at reduced customs duty rates. In line with section 269F, an entity can apply for a TCO if the goods in question are not excluded under section 269SJ and meet the core criteria outlined in section 269C, which stipulates that no substitutable goods should be produced in Australia at the time of application. In the case of Aussie Outback Supplies' application for a TCO on certain PVC laminated convertible bags, the CEO determined that no substitutable goods were being produced domestically, leading to the issuance of TCO No. 0822710, which effectively reduced the duty on these goods from 5% to free.
Scope and Application
The Tariff Concession Instrument No. 0822710, under the Customs Act 1901, applies to goods specified in the instrument, namely certain PVC laminated convertible bags, and provides for a concession on the customs duty payable on these goods. The Act applies to the Chief Executive Officer of Customs (CEO) who has the authority to make Tariff Concession Orders (TCOs) for goods not specified in section 269SJ of the Act, which excludes certain goods from the scope of TCOs. The CEO must determine if the application for a TCO meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application was lodged. The instrument was made on 17 October 2008, and it is effective from the date the application was lodged, 23 July 2008, under subsection 269S(1) of the Act. The application of the TCO does not affect any existing rights of persons other than the Commonwealth, nor does it impose any new liabilities on persons other than the Commonwealth. Instead, it benefits importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The key operative sections of this legislation concern the application and approval process for Tariff Concession Orders (TCOs) under the Customs Act 1901 (the Act). Specifically, section 269F allows an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. Section 269C then stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that these criteria are met, section 269P(3) requires the CEO to make a written order (the TCO) declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). The obligations imposed on parties under this legislation include the requirement for an applicant to ensure their application meets the core criteria, as outlined in sections 269C and 269F. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made, as per subsection 269K(1) of the Act.
The obligations and requirements the Act imposes on the CEO include assessing the validity of the TCO application, determining whether it meets the core criteria, and publishing a notice in the Gazette for public submissions. Once a TCO is made, section 269S(1) ensures that it is taken to have come into force on the day the application was lodged. The TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person, as outlined in the explanatory statement. Importers will benefit from being able to apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.
The legislation does not explicitly outline specific offences, penalties, or civil/criminal consequences for breach. However, it is reasonable to infer that any failure to comply with the requirements for making a TCO application or for the CEO to adequately assess and publish a TCO could lead to legal challenges or disputes. The Tariff Concession Instrument No. 0822710 itself was made based on the assumption that the application met the core criteria and no substitutable goods were produced in Australia, so non-compliance could result in the TCO being contested or overturned. The explanatory statement indicates that the TCO does not impose any liabilities on any person, but it does not provide details on potential sanctions for failing to meet the conditions for a TCO.