EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0834524
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.
Ed Oates Pty Ltd applied for a TCO in respect of certain broom handles on 08 October 2008.
Instrument
TCO No 0834524 was made on 14 January 2009. It declares that those certain broom handles 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. 0834524 is taken to have come into force on 08 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 Order No. 0834524, made under the Customs Act 1901, was enacted to provide tariff concessions for certain broom handles, effectively reducing the duty on these goods to zero. This instrument was introduced to address the specific issue of ensuring that Australian consumers and businesses have access to competitively priced goods by reducing the customs duty for items that are not produced domestically and for which there are no suitable substitutes available in the Australian market. The Tariff Concession Orders scheme allows the Chief Executive Officer of Customs to apply a lower rate of customs duty on goods, provided they meet the core criteria outlined in the Act, such as the absence of substitutable goods produced in Australia. The order was made on 14 January 2009, and it is considered to have come into force on 8 October 2008, the date the application was lodged. This legislative instrument aims to facilitate trade and enhance economic efficiency by ensuring that essential goods are available at reduced costs, thereby benefiting importers and, ultimately, consumers.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), thereby enabling the application of lower customs duty rates to certain goods. This process is applicable to individuals and entities seeking tariff concessions for goods, provided that the goods are not specified as ineligible under section 269SJ of the Act. The core criteria for approving a TCO, as outlined in section 269C, necessitate that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged, as defined in sections 269D and 269E. In the case of Ed Oates Pty Ltd, a TCO was granted for certain broom handles on 14 January 2009, reducing the duty rate from 5% to free, effective from 8 October 2008, the date the application was lodged. This legislative mechanism allows for the dynamic adjustment of customs duties to support specific industries and ensure competitive pricing, while also providing a transparent process for public consultation as required by subsection 269K(1) of the Act.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (section 269F). The purpose of a TCO is to apply a reduced rate of customs duty on certain goods, provided that specific criteria are met. Section 269C stipulates that for a TCO application to meet the core criteria, it must be established that no substitutable goods are being produced in Australia at the time the application is lodged. This is further defined by sections 269D, 269E, and 269F, which detail the meaning of "goods produced in Australia," "ordinary course of business," and "substitutable goods," respectively.
The obligations imposed by the Act on parties applying for a TCO are straightforward. An applicant must ensure that their application is not for goods specified in section 269SJ, which lists those goods ineligible for a TCO. The CEO must then evaluate whether the application meets the core criteria as defined by sections 269C and 269P(3). If satisfied, the CEO is required to issue a written TCO order. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO (subsection 269K(1)). The TCO in question, No. 0834524, was applied for by Ed Oates Pty Ltd on 8 October 2008, and the CEO issued the order on 14 January 2009.
The consequences of breaching the provisions of the Customs Act 1901, particularly in relation to TCOs, are governed by the Act itself and the Customs Regulations 1995. While the explanatory statement does not explicitly detail criminal or civil penalties for breaches, it is understood that non-compliance with the Act's requirements could lead to legal actions. The Act’s focus is on ensuring that TCOs are applied correctly to avoid any undue financial advantage or disadvantage to any party. Furthermore, the Act ensures that the rights of importers are protected, as they can apply for duty refunds on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). The TCO itself does not impose any liabilities on any person, safeguarding against any adverse effects prior to its registration.