EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833068
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.
Oztent Aust Pty Ltd applied for a TCO in respect of certain shelters on 26 September 2008.
Instrument
TCO No 0833068 was made on 12 January 2009. It declares that those certain shelters 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. 0833068 is taken to have come into force on 26 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, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation was introduced to address the need for a streamlined process to reduce customs duties on specific goods, thus encouraging importation and supporting economic activities. TCOs provide a mechanism for lowering the duty on certain goods to zero, provided that no substitutable goods are produced in Australia. This policy objective aims to enhance trade by making imported goods more competitive, ultimately benefiting consumers and importers by reducing the cost of goods. Oztent Aust Pty Ltd’s application for a TCO concerning certain shelters exemplifies this process, resulting in a tariff concession that came into effect on the date of the application, 26 September 2008. This legislative instrument ensures that the rights of importers are protected and can benefit from duty refunds for goods imported since the TCO took effect.
Scope and Application
The Tariff Concession Instrument No. 0833068, made under the Customs Act 1901, applies to Oztent Aust Pty Ltd and its specific shelters, which are now subject to a lower rate of customs duty as a result of this instrument. The application of this instrument is limited to the goods specified in the instrument, namely certain shelters, and it applies at a Commonwealth level across Australia. The instrument was created to ensure that the application for tariff concessions met the core criteria as outlined in the Customs Act, which includes a provision that no substitutable goods were produced in Australia on the date the application was lodged. The instrument does not extend to any goods or entities beyond those specified in the application, and it does not disadvantage any person by affecting their rights prior to the date of registration. The instrument is effective from the date the application was lodged, which is 26 September 2008, and allows for the potential refund of duties paid on these goods since that date. This instrument does not impose any liabilities on any person other than the Commonwealth.
Key Provisions
The primary operative sections of this legislation are sections 269F, 269C, and 269P of the Customs Act 1901, which together establish the framework for the creation of Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is deemed valid, section 269C sets out the core criteria that must be satisfied for the CEO to grant the TCO, primarily focusing on whether there are no substitutable goods produced in Australia. If the CEO is satisfied that the application meets these criteria, section 269P(3) requires the CEO to make a written order, a TCO, that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For the current TCO No. 0833068, the CEO determined that the application met the criteria, and the shelters in question now attract a duty rate of free, as opposed to the general rate of 5%.
The obligations imposed by this Act on the parties it governs are primarily directed at the CEO. Upon receiving a TCO application, the CEO must assess whether it meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods are being produced in Australia. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made, as stipulated in section 269K(1). If no submissions are received, the CEO must proceed to make the TCO if the application meets the criteria. The process requires the CEO to act diligently and transparently to ensure the integrity of the TCO scheme.
Breaches of the provisions in this Act can lead to civil or criminal consequences. Although the specific offences and penalties are not detailed in the explanatory statement, the Customs Act 1901 generally provides for various penalties for non-compliance with its provisions. These can include fines and imprisonment for criminal offences, as well as civil penalties such as financial penalties for breaches. The exact penalties would depend on the specific nature and severity of the breach, as outlined in other sections of the Act and related legislation. The legislative framework ensures that there are significant deterrents against improper applications or misuse of the TCO scheme.
The Tariff Concession Order No. 0833068 specifically benefits importers by reducing the duty rate on certain shelters to free, provided that these goods are imported after the date the TCO is taken to have come into force, which is 26 September 2008. Importers can also apply for a refund of duty on goods imported since that date, under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not affect the rights of any person adversely or impose any liabilities for actions taken prior to the registration date, thereby protecting existing rights and obligations.