EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0826065
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 lower body trainer exercise equipment on 12 August 2008.
Instrument
TCO No 0826065 was made on 31 October 2008. It declares that those certain lower body trainer exercise equipment 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. 0826065 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 Parliament of Australia, established a framework for the imposition of tariffs on imported goods, with the Customs Act providing for the creation of Tariff Concession Orders (TCOs) through Part XVA. These TCOs allow for a lower rate of customs duty on specified goods, contingent upon the Chief Executive Officer of Customs determining that the application for such concessions meets the outlined criteria and that no substitutable goods are produced in Australia. This legislative instrument was introduced to address the need for flexible tariff arrangements that can benefit importers and encourage the importation of specific goods by reducing duty rates. Tariff Concession Instrument No. 0826065, made on 31 October 2008, is an example of such a concession applied to certain lower body trainer exercise equipment, where the general duty rate was reduced to free, effective from the date of the application on 12 August 2008.
Scope and Application
The Customs Act 1901, as applied through Tariff Concession Instrument No. 0826065, pertains to the application and implementation of Tariff Concession Orders (TCOs) which provide for reduced customs duty rates on specified goods. This Act applies to entities or individuals seeking tariff concessions on certain goods, which must not include those explicitly barred by section 269SJ of the Act. The scope of this legislation is national, administered by the Commonwealth through the Chief Executive Officer of Customs, who assesses applications for TCOs against the criteria set out in sections 269C and 269D of the Act, ensuring that the goods in question are not substitutable by locally produced goods and are not those prohibited from concession. The application process includes public consultation as mandated by subsection 269K(1) of the Act, although in the case of TCO No. 0826065, no objections were lodged. This instrument extends its effect retroactively to the date of the application, ensuring that it does not disadvantage any party or impose new liabilities on actions taken prior to its registration.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 0826065 under the Customs Act 1901 focus on the application and granting of Tariff Concession Orders (TCOs) for certain goods. Section 269F of the Act allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. For a TCO application to meet the core criteria, section 269C stipulates that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The definitions of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' are further elaborated in sections 269D, 269E, and 269B respectively. Once the CEO is satisfied that the application meets these core criteria, a written TCO must be issued under section 269P(3), declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by this Act on the parties or entities it governs are primarily centred on the application process and the criteria for granting a TCO. The CEO must ensure that the application for a TCO is not in respect of goods that are ineligible under section 269SJ. Furthermore, the CEO must verify that no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C. Once these criteria are met, the CEO is required to issue a TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. In this particular case, no submissions were received in response to the published notice.
Under the Customs Act 1901, there are specific consequences for breaches of the provisions related to TCOs. Although the explanatory statement does not detail specific offences or penalties for failing to comply with the Act, it is reasonable to infer that non-compliance with the requirements for issuing a TCO, or providing false information in an application, could lead to penalties as outlined in the Customs Act. Such penalties might include fines or other civil or criminal consequences, depending on the severity and intent of the breach. However, the explanatory statement does not provide specific details on the maximum penalties applicable. The rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person.