EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826064
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.
General Merchandise & Apparel Group Pty Ltd applied for a TCO in respect of certain skateboards on 12 August 2008.
Instrument
TCO No 0826064 was made on 24 October 2008. It declares that those certain skateboards 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. 0826064 is taken to have come into force on 12 August 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, establishes a framework for the administration of customs and excise through the Australian Customs Service. The Act allows for the creation of Tariff Concession Orders (TCOs) to provide lower rates of customs duty on specific goods. The explanatory statement for Tariff Concession Instrument No. 0826064, issued under the Customs Act 1901, details the application process for TCOs and the criteria that must be met for the concession to be granted. The instrument was introduced to address the need for tariff concessions on goods where no substitutable products are produced domestically. In this particular case, the instrument grants a tariff concession for certain skateboards, reducing the duty from 5% to free, effective from the date the application was lodged, 12 August 2008. The policy objective is to provide tariff relief to importers of the specified goods, thereby potentially lowering the cost of these goods for consumers and supporting related industries.
Scope and Application
The Customs Act 1901, under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at applying a lower rate of customs duty to certain goods. This Act applies to any person or entity that imports goods into Australia, specifically those who may benefit from a reduced customs duty rate as per a TCO. The scope of the Act encompasses both individuals and corporate entities involved in the importation of goods, provided these goods are not those specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. The geographic reach of this legislation is national, as it applies across Australia under the Commonwealth’s authority. An exclusion exists for goods that are substitutable and produced in Australia, as outlined in sections 269D, 269E, and 269F of the Act. Additionally, the application of this Act can be extended or restricted through subordinate instruments, which provide further detail and specificity in the implementation of TCOs.
Key Provisions
The Customs Act 1901 (the Act) provides the framework for the implementation of Tariff Concession Orders (TCOs) under Part XVA, as explained in the Explanatory Statement for Tariff Concession Instrument No. 0826064. Section 269F allows for the application of a TCO to reduce the customs duty on certain goods, provided that these goods do not fall under the exclusions outlined in section 269SJ. If the Chief Executive Officer of Customs (the CEO) is satisfied that the application meets the core criteria, as stipulated in section 269C, they must make a written order declaring the goods to which the specified tariff applies. For example, in TCO No. 0826064, the CEO determined that certain skateboards are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a tariff rate of free duty instead of the general rate of 5%.
The Act imposes specific obligations on both applicants and the CEO in the TCO process. Under section 269P(3), the CEO must ensure that no substitutable goods are produced in Australia on the day the application is lodged, as defined by sections 269D and 269E of the Act. Additionally, subsection 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO. This ensures a transparent process and provides an opportunity for stakeholders to voice their concerns. In the case of TCO No. 0826064, the CEO did not receive any submissions opposing the order.
Failure to comply with the provisions of the Customs Act 1901 can lead to various consequences, including potential penalties and legal action. While the Explanatory Statement does not specify exact penalties for non-compliance with TCOs, breaches of other sections in the Act may incur fines or imprisonment, as per the general provisions of the Act. The TCO itself, however, does not impose any liabilities on persons other than the Commonwealth, and it does not affect rights as at the date of registration. Importers of the affected goods may also be eligible for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.