EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829126
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 ceramic pet food utensils on 02 September 2008.
Instrument
TCO No 0829126 was made on 28 November 2008. It declares that those certain ceramic pet food utensils 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. 0829126 is taken to have come into force on 02 September 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. 0829126, issued under the Customs Act 1901, was enacted to provide tariff concessions for specific goods, facilitating a reduction in customs duty for those items. This legislative instrument was introduced to address the gap in tariff relief for certain goods, specifically ceramic pet food utensils in this case, thereby potentially lowering costs for businesses and consumers. The instrument was enacted by the Chief Executive Officer of Customs, who was mandated to consider and decide on tariff concession applications based on the core criteria set out in the Act. The policy objective is to provide duty-free status for goods that are not produced in Australia and have no substitutable goods domestically, thereby encouraging trade and reducing costs for importers.
The Reject Shop Pty Ltd's application for a tariff concession order (TCO) for certain ceramic pet food utensils was processed and approved by the CEO, who determined that no substitutable goods were produced in Australia. Consequently, TCO No. 0829126 was issued, declaring that these specific goods are subject to a zero percent duty rate, down from the general rate of 5%. The TCO, which came into effect on the date of application, aims to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the TCO's effective date, without imposing any new liabilities on other parties.
Scope and Application
The Tariff Concession Instrument No. 0829126 applies to the specific goods for which The Reject Shop Pty Ltd applied for a Tariff Concession Order (TCO) under the Customs Act 1901. This legislation facilitates a reduced rate of customs duty on goods specified in a TCO, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The scope of the Act extends to any entity or individual that imports goods eligible for a TCO, with the condition that the application must not pertain to goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. The geographic reach of this Act is national, as it is administered under the Commonwealth of Australia. The Act allows for the possibility of exclusions and exemptions through subordinate instruments, such as regulations that may further define terms or specify additional criteria. However, the particular TCO No. 0829126 applies exclusively to the ceramic pet food utensils for which The Reject Shop Pty Ltd made the application.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0829126, made under the Customs Act 1901, establish a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders provide a lower rate of customs duty on goods specified in the TCO (s 269F). The CEO must consider an application for a TCO and decide if it meets the core criteria, which include ensuring no substitutable goods are produced in Australia at the time of application (s 269C). If the application meets these criteria, the CEO must issue a written order, declaring that the goods in question are subject to a prescribed rate of duty (s 269P(3)). For the TCO in question, the CEO was satisfied that no substitutable goods were produced in Australia, and thus issued a TCO on 28 November 2008, effective from 02 September 2008, lowering the duty on certain ceramic pet food utensils from 5% to free (s 269S(1)).
The obligations and requirements imposed by the Act on the parties involved are primarily directed towards the CEO of Customs. The CEO must accept a valid application for a TCO and determine if it meets the core criteria. This involves assessing whether any substitutable goods are produced in Australia at the time of application (s 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may wish to object to the TCO (s 269K(1)). Additionally, the CEO must ensure that the TCO does not affect the rights of any person adversely as of the date of registration, nor impose any liabilities on any person in respect of actions taken prior to the registration of the TCO (s 269S).
The Act also outlines specific offences and penalties for breaches. While the explanatory statement does not detail specific penalties, general provisions in the Customs Act 1901 and associated regulations may apply. For example, under section 210 of the Customs Act, contravening the provisions of the Act or any regulations can lead to criminal charges and penalties, including fines and imprisonment. The exact penalties would depend on the nature and severity of the breach, but they can include substantial fines and imprisonment for serious offences.
In summary, Tariff Concession Instrument No. 0829126 allows for the issuance of TCOs that lower the customs duty on certain goods, provided the CEO is satisfied that no substitutable goods are produced in Australia. The CEO must accept valid applications, assess them against the core criteria, and publish notices inviting submissions. Failure to comply with the Act’s provisions could result in criminal charges and penalties, including fines and imprisonment, depending on the severity of the breach.