EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833877
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.
Avanti Imports Pty Ltd applied for a TCO in respect of certain domestic gyms on 02 October 2008.
Instrument
TCO No 0833877 was made on 12 January 2009. It declares that those certain domestic gyms 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. 0833877 is taken to have come into force on 02 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 Tariff Concession Instrument No. 0833877, enacted in 2009, addresses the problem of applying for tariff concessions under Part XVA of the Customs Act 1901. This Act, enacted by the Parliament of Australia, provides a mechanism for reducing customs duty on specific goods via Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. Avanti Imports Pty Ltd applied for a TCO for certain domestic gyms, and the instrument was made on 12 January 2009, declaring that these goods are subject to a zero rate of duty, reducing the general rate of 5% as specified in Schedule 4 to the Customs Tariff Act 1995. The policy objective, as stated in the Act, is to ensure that the application process for TCOs is transparent and allows for public consultation, although in this instance, no submissions were received. The instrument came into force on the date the application was lodged, 2 October 2008, and it benefits importers by potentially allowing them to apply for a refund of duty on imported goods since that date.
Scope and Application
The Tariff Concession Instrument No. 0833877 under the Customs Act 1901 applies to individuals or entities seeking tariff concessions on certain goods imported into Australia, specifically in this case, certain domestic gyms. The Act mandates that the Chief Executive Officer of Customs must assess whether the application for a Tariff Concession Order meets the core criteria, which includes ensuring that no substitutable goods are produced in Australia at the time of the application. If the criteria are met, the CEO is required to issue a written order, effective from the date the application was lodged, exempting the specified goods from the general customs duty rate. This particular instrument was made in response to an application by Avanti Imports Pty Ltd, which sought to apply for a tariff concession on certain domestic gyms, and was registered on 12 January 2009. The instrument does not retroactively affect the rights of any person other than the Commonwealth and does not impose any liabilities on individuals or entities other than the Commonwealth.
The geographic scope of this legislation is national, applying across Australia as it pertains to the importation of goods into the country. The Act does not specify any exclusions or exemptions other than those outlined in section 269SJ of the Act, which lists goods that cannot be subject to a Tariff Concession Order. The application of this legislation may be further refined through subordinate instruments, which can provide additional details or specific conditions under which the tariff concessions apply.
Key Provisions
The main operative sections of the Tariff Concession Order No. 0833877 under the Customs Act 1901 (section 269C, 269F, 269P, 269K, and 269S) outline the process and criteria for granting tariff concessions. Essentially, these sections require that an application for a tariff concession order (TCO) is made to the Chief Executive Officer of Customs (section 269F). The CEO must then determine whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If the application meets these criteria, the CEO must issue a written TCO, which declares that the goods in question are subject to a specified lower rate of duty (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received for this particular TCO (section 269K). The TCO is deemed to come into force on the day the application was lodged (section 269S).
The Act imposes certain obligations on the parties involved. The primary obligation lies with the applicant, such as Avanti Imports Pty Ltd in this case, who must ensure their application for a TCO is valid and meets the core criteria. This includes demonstrating that no substitutable goods were produced in Australia. The CEO, on the other hand, has the duty to assess the application against these criteria and make a decision accordingly. Once a TCO is issued, the CEO must also publish a notice in the Gazette to allow for any objections, although no submissions were received for TCO No. 0833877. Importers of the goods subject to the TCO also have obligations, such as the ability to apply for a refund of duty on goods imported since the TCO came into force.
Failure to comply with the provisions of the Customs Act 1901 and associated regulations could result in various consequences. While the explanatory statement does not detail specific offences or penalties for breaches, general provisions within the Act may apply. For instance, any person who contravenes the Act or regulations could face civil or criminal penalties, including fines and imprisonment. However, the maximum penalties are not specified in the explanatory statement but would typically be found in the relevant sections of the Act and regulations. The TCO itself does not impose any new liabilities on any person, but it does affect the rights of importers by potentially entitling them to a refund of duty paid on goods imported since the TCO came into force.