EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833709
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.
Style Australasia Pty Ltd applied for a TCO in respect of certain bamboo flooring on 01 October 2008.
Instrument
TCO No 0833709 was made on 12 December 2008. It declares that those certain bamboo flooring 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. 0833709 is taken to have come into force on 01 October 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 was enacted by the Australian Parliament to facilitate the regulation of customs and excise duties, and it includes provisions for Tariff Concession Orders (TCOs) under Part XVA. The Act was introduced to address the need for a streamlined process by which businesses could apply for lower customs duty rates on certain imported goods, provided certain conditions were met. The policy objective is to facilitate trade by reducing the financial burden on importers of specific goods, thereby encouraging the importation of goods that are not produced domestically or are substitutable. TCO No. 0833709, made in 2008, is an example of this mechanism in action, whereby the Chief Executive Officer of Customs granted a tariff concession on certain bamboo flooring, reducing the duty rate from the general 5% to free, after determining that no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901, as supplemented by the Tariff Concession Instrument No. 0833709, applies to any person or entity seeking tariff concessions on imported goods that are not being produced in Australia. The Act provides a framework under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) for specific goods, allowing for a lower rate of customs duty on those goods. The scope of the Act is broad, encompassing any goods that meet the criteria for a tariff concession, provided they are not specified in section 269SJ as those ineligible for such concessions. The Act operates on a national level across Australia, with the authority to grant tariff concessions being a Commonwealth responsibility. The Act’s application is extended through subordinate instruments, which detail specific conditions and processes for making and administering TCOs. Notably, the Act ensures that the rights of existing importers are not adversely affected by the introduction of a TCO, and it allows for the refund of duties paid on eligible goods since the TCO's effective date.
Key Provisions
The main operative sections of this legislation pertain to the process of applying for and obtaining a Tariff Concession Order (TCO) under the Customs Act 1901. Specifically, section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided these goods are not specified in section 269SJ. The CEO must then decide if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied, they must make a written order, as outlined in section 269P(3), specifying that the goods in question are subject to a prescribed item of Schedule 4 of the Customs Tariff Act 1995, thus applying a reduced rate of duty.
The obligations and requirements imposed by the Act on the parties or entities it governs include ensuring that any application for a TCO is made in accordance with the provisions of section 269F. The CEO has the responsibility of determining whether the application meets the criteria specified in section 269C, which involves verifying that no substitutable goods were produced in Australia at the time of application. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as required by subsection 269K(1), though no submissions were received in this instance. The TCO itself, once made, affects the rights of importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force.
In terms of offences, penalties, or consequences for breach, the Customs Act 1901 does not explicitly outline specific criminal or civil penalties for failing to comply with the TCO process. However, any breach of the conditions or misuse of the TCO could potentially lead to actions under broader customs legislation, including fines or legal proceedings for non-compliance. The consequences for breaching any related customs laws could include substantial fines and other civil penalties as stipulated in the relevant sections of the Customs Act 1901 and associated regulations.