EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0831592
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.
Chrysco Flowers Pty Ltd applied for a TCO in respect of certain flower growing tables on 17 September 2008.
Instrument
TCO No 0831592 was made on 05 December 2008. It declares that those certain flower growing tables 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. 0831592 is taken to have come into force on 17 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 Australian Parliament, provides a framework for the imposition and remission of customs duty on goods entering Australia. The Act establishes a system through which Tariff Concession Orders (TCOs) can be issued to reduce or eliminate customs duty on certain goods, provided specific criteria are met. The 2009 Tariff Concession Instrument No. 0831592 under this Act was introduced to address the issue of applying tariff concessions for specific goods, namely flower growing tables in this instance. The instrument was issued by the Chief Executive Officer of Customs (CEO) after Chrysco Flowers Pty Ltd applied for a TCO, and the CEO determined that the application met the core criteria, specifically that no substitutable goods were produced in Australia at the time of application. The policy objective behind this concession is to facilitate the import of goods that are not locally produced, thereby potentially lowering costs and encouraging the import of specialised goods into Australia.
Scope and Application
The Tariff Concession Instrument No. 0831592 under the Customs Act 1901 applies specifically to the concession of customs duty rates for certain flower growing tables, which were the subject of an application by Chrysco Flowers Pty Ltd. This legislation pertains to the process whereby the Chief Executive Officer of Customs determines whether to grant a Tariff Concession Order (TCO) that reduces the customs duty on specified goods. The TCO applies to the entities and individuals importing the designated goods, provided that no substitutable goods are produced in Australia and that the application complies with the core criteria outlined in the Act. The geographic reach of this legislation is national, as it is governed by the Commonwealth of Australia. The TCO does not affect existing rights or impose new liabilities on any party other than the Commonwealth, and it benefits importers by allowing them to apply for a refund of duty paid on the goods since the effective date of the TCO, which is the date the application was lodged. The Act's application may be further extended or detailed through subordinate instruments, such as regulations, which can provide additional specifications and procedural requirements.
Key Provisions
The Tariff Concession Instrument No. 0831592 under the Customs Act 1901 (the Act) establishes a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (the CEO) to apply a lower rate of customs duty to specified goods (s 269F). Section 269C stipulates that for a TCO to be granted, the application must meet the core criteria, which includes the requirement that no substitutable goods were produced in Australia on the date the application was lodged (s 269C). In this case, Chrysco Flowers Pty Ltd successfully applied for a TCO for certain flower growing tables on 17 September 2008, which was subsequently issued by the CEO on 5 December 2008, declaring that these tables are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free instead of the general 5% (s 269P(3)).
The Act imposes several obligations on parties involved in the TCO process. For instance, section 269K(1) mandates that the CEO must publish a notice in the Gazette inviting submissions from interested parties once an application is accepted as valid. In this instance, the CEO published the notice and received no submissions opposing the TCO (s 269K(1)). Additionally, the Act requires that the CEO must decide whether an application meets the core criteria, including verifying that no substitutable goods were produced in Australia (s 269C). The CEO must also ensure that the TCO does not disadvantage any person other than the Commonwealth or impose liabilities for actions taken before the TCO registration date (s 269S(1)).
Under the Customs Act 1901, the failure to comply with the requirements for issuing a TCO, or any misrepresentation in an application, may lead to enforcement actions. While specific offences and penalties are not detailed in the explanatory statement, general provisions under the Customs Act 1901 and related regulations may apply. These could include fines or imprisonment for knowingly making false statements or representations in an application, as well as potential civil penalties for non-compliance with customs duties and regulations. The Act ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into effect (Reg 126(1)(r)).