EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0829543
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.
Gibbon Group Pty Ltd applied for a TCO in respect of certain floor coverings on 04 September 2008.
Instrument
TCO No 0829543 was made on 28 November 2008. It declares that those certain floor coverings 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 10%. 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. 0829543 is taken to have come into force on 04 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the imposition and management of customs duties. One of its key mechanisms is the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). The problem or gap addressed by this Act is to provide a process for applying for reduced customs duties on goods that are not produced domestically, ensuring fair trade practices and supporting industries that rely on imported materials. The policy objective of this legislation is to facilitate the importation of goods by providing tariff concessions where appropriate, thereby promoting economic efficiency and competitiveness. In response to an application from Gibbon Group Pty Ltd, Tariff Concession Order No. 0829543 was made on 28 November 2008, effectively granting a tariff concession on certain floor coverings and setting their duty rate at free, down from the general rate of 10%. This order came into force on 04 September 2008, the date the application was lodged, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 0829543, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) that grant lower rates of customs duty on certain goods. This particular TCO, applied for by Gibbon Group Pty Ltd on 04 September 2008, pertains to specific floor coverings that are now subject to a free duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995. The Act applies to any individual or entity seeking to import goods that meet the specified criteria, ensuring they are not substitutable by Australian-produced goods and not explicitly excluded under section 269SJ. The geographic scope of this Act is national, as it pertains to the importation of goods into Australia, thereby affecting all states and territories. The application process requires the CEO to consider whether the goods in question are substitutable by Australian-produced goods, with the TCO taking effect from the date of application submission. The legislation does not impose any retroactive liabilities or disadvantages on parties other than the Commonwealth and provides for potential refunds of duty for importers of the affected goods since the effective date of the TCO.
Key Provisions
The main operative sections of this legislation (F2009L00388) involve the creation and administration of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO for certain goods, provided these goods are not specified in section 269SJ of the Act as ineligible. The CEO must then determine whether the application meets the core criteria set out in section 269C, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that these criteria are met, they must issue a TCO as per section 269P(3). In this specific case, TCO No. 0829543 was issued on 28 November 2008, declaring that certain floor coverings are subject to a free rate of duty as they correspond to item 50 of Schedule 4 of the Customs Tariff Act 1995.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved include the necessity for applicants to ensure that their applications meet the core criteria for a TCO. This involves demonstrating that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, in turn, has the obligation to review applications to ascertain whether they meet these criteria and to make a decision in writing, either to issue or to refuse a TCO. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as stipulated in subsection 269K(1) of the Act. In this instance, the CEO did not receive any submissions against the application.
The Customs Act 1901 provides for various consequences if the requirements of the Act are not met or if there are breaches. Although the explanatory statement does not detail specific civil or criminal penalties, it is implied that failure to comply with the terms of a TCO or non-compliance with the Act’s provisions could lead to legal ramifications. These could include financial penalties or other legal actions depending on the nature and severity of the breach. In this case, the TCO No. 0829543 came into force on 04 September 2008, and it does not affect the rights of any person other than the Commonwealth or impose any liabilities on any person in respect of anything done or omitted before the registration date.