EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833535
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 applied for a TCO in respect of certain cd protectors on 30 September 2008.
Instrument
TCO No 0833535 was made on 12 December 2008. It declares that those certain cd protectors 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. 0833535 is taken to have come into force on 30 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 for the regulation of customs and excise through various instruments, including Tariff Concession Orders (TCOs). These TCOs allow for reduced customs duty rates on specific goods, provided certain criteria are met. The Tariff Concession Instrument No. 0833535 was introduced to address the specific need of applying lower customs duty rates on certain CD protectors, as requested by The Reject Shop. This instrument was made under the authority of the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia at the time of application. The policy objective behind this legislation is to provide tariff relief where appropriate, thereby potentially reducing costs for importers and encouraging trade without disadvantaging existing rights or imposing new liabilities on individuals.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) which may be made by the Chief Executive Officer of Customs (the CEO) to allow a lower rate of customs duty on certain goods. Specifically, Part XVA of the Act allows a person to apply to the CEO for a TCO if the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO must consider whether the application meets the core criteria, such as whether 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 the application meets these criteria, a TCO is made, specifying the reduced duty rate on the goods. The TCO instrument in question, TCO No. 0833535, pertains to certain CD protectors, granting them a duty-free status as of 30 September 2008, the date the application was lodged, and the CEO was satisfied that no substitutable goods were produced in Australia, thereby meeting the core criteria.
Key Provisions
The Customs Act 1901 (the Act) facilitates the application of lower rates of customs duty on certain goods through the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) (s 269F). For instance, TCO No. 0833535 pertains to certain CD protectors, declaring them subject to a free rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995 (the Tariff) (s 269P(3)). This instrument came into force on 30 September 2008, the date the application was lodged (s 269S(1)).
The Act imposes specific criteria that must be met for a TCO application to be considered valid. According to section 269C, an application is valid if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This definition is further elaborated in sections 269D and 269E, which clarify the meaning of 'goods produced in Australia' and 'ordinary course of business,' respectively. Additionally, 'substitutable goods' are defined in section 269B as goods produced in Australia that can be used for the same purpose as the goods in question. If the CEO determines that these criteria are met, they must issue a written order (s 269P(3)).
Entities subject to the Act must ensure compliance with these criteria when applying for a TCO. They must provide sufficient evidence that no substitutable goods were produced in Australia at the time of application. The CEO is obligated to review these applications and, if satisfied, issue the corresponding order. Furthermore, as per section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to submit any objections or reasons why the TCO should not be granted. In this instance, no submissions were received, which likely facilitated the swift approval of the TCO.
Breaching the requirements of the Act or failing to adhere to the conditions of a TCO can lead to significant consequences. While specific offences, penalties, or civil/criminal consequences for breaches are not detailed in the text, general provisions under the Customs Act 1901 suggest that non-compliance could result in financial penalties, legal action, or other enforcement measures. It is essential for entities to ensure strict adherence to the Act's provisions to avoid these potential repercussions.