EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833236
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.
Qualatex Australia applied for a TCO in respect of certain balloons and balloon accessories on 29 September 2008.
Instrument
TCO No 0833236 was made on 12 January 2009. It declares that those certain balloons and balloon accessories 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. 0833236 is taken to have come into force on 29 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 regulation of customs and excise through Tariff Concession Orders (TCOs). These orders, issued by the Chief Executive Officer of Customs, aim to facilitate trade by reducing customs duty on certain goods, provided that no substitutable goods are produced in Australia. This legislation addresses the gap in reducing the tariff burden on specific goods to encourage their importation and use in Australia. The policy objective is to ensure that the application of tariff concessions does not disadvantage Australian producers or impose new liabilities on persons. The Explanatory Statement for Tariff Concession Instrument No. 0833236 clarifies that the instrument, which was effective from 29 September 2008, grants tariff concessions to certain balloons and balloon accessories, setting their duty rate at free, thereby benefiting importers by potentially allowing them to claim refunds for duties paid on imports before the instrument's effective date.
Scope and Application
The Tariff Concession Instrument No. 0833236 under the Customs Act 1901 applies to entities and individuals involved in the importation of specified goods, namely certain balloons and balloon accessories, and provides them with a concession on customs duty rates. This instrument was enacted to facilitate lower duty rates for these goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The scope of the Act extends to any application for a Tariff Concession Order (TCO) that meets the core criteria, as defined under the Act. The geographic reach of this legislation is national, as it applies across Australia and is managed by the Commonwealth through the Chief Executive Officer of Customs. The Act includes exclusions for certain goods specified in section 269SJ of the Customs Act, which cannot be subject to a TCO. The Act’s application can be further defined or restricted through subordinate instruments, although no such instruments are mentioned in this specific context. The commencement date of this TCO is aligned with the date of the application, 29 September 2008, with no retroactive effect on pre-existing rights or liabilities of parties involved.
Key Provisions
The Tariff Concession Order (TCO) No. 0833236, under the Customs Act 1901 (section 269F), allows for a lower rate of customs duty on certain goods, specifically balloons and balloon accessories, when a TCO is granted. This order was made on 12 January 2009, and it came into force on 29 September 2008, the date the application was lodged (section 269S(1)). The TCO stipulates that these goods are now subject to a duty rate of free, down from the general rate of 5% (section 269P(3)). This concession applies to goods that are not substitutable by Australian-produced alternatives, which is a core criterion for the TCO (section 269C).
The Act imposes several obligations on the parties involved. Firstly, the Chief Executive Officer of Customs (CEO) must determine whether an application for a TCO meets the core criteria, specifically checking that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was made (section 269C). If the CEO decides that the application meets these criteria, they must issue a written TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). In this instance, no submissions were received.
In terms of consequences for breach, the Customs Act 1901 does not specify particular offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions themselves. However, any failure to adhere to the terms of the TCO could potentially lead to disputes or administrative actions. For example, if an entity fails to correctly apply for or comply with the terms of the TCO, it might face penalties under broader customs legislation for non-compliance with customs regulations, which could include fines or other administrative sanctions. The specifics of such penalties would depend on the broader context of the breach within the customs regulatory framework.