EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0835935
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 Pty Ltd applied for a TCO in respect of certain wire mesh desk sets on 16 October 2008.
Instrument
TCO No 0835935 was made on 23 January 2009. It declares that those certain wire mesh desk sets 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. 0835935 is taken to have come into force on 16 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, enacted by the Australian Parliament, establishes a framework for the imposition of customs duties on imported goods. It includes provisions for Tariff Concession Orders (TCOs) under Part XVA, designed to provide tariff relief on certain goods, thereby addressing the gap in reducing the cost of specific imported items that do not have Australian substitutes. The Tariff Concession Instrument No. 0835935, issued on 23 January 2009, applies this framework to certain wire mesh desk sets by the Reject Shop Pty Ltd. The policy objective of this instrument is to ensure that the goods, which are not produced in Australia and have no substitutable Australian goods, are granted a tariff concession, thus reducing the customs duty rate from 5% to free, effective from the date of the application on 16 October 2008. This instrument was introduced to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the effective date of the concession, without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0835935, made under the Customs Act 1901, applies to a specific set of wire mesh desk sets for which The Reject Shop Pty Ltd applied for a Tariff Concession Order (TCO). The Act allows the Chief Executive Officer of Customs (CEO) to make TCOs that provide a lower rate of customs duty on certain goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The TCO No. 0835935 applies to the wire mesh desk sets as the CEO was satisfied that no such Australian-produced goods exist, resulting in a duty rate of free instead of the general rate of 5%. The geographic and jurisdictional reach of this Act is Commonwealth, with the TCO applying nationally. The TCO came into effect on the date of the application, 16 October 2008, and does not affect any pre-existing rights or liabilities of individuals or entities, except for potentially benefiting importers who can apply for a refund of duty on imported goods since the TCO's effective date. The CEO published a notice in the Gazette inviting submissions against the TCO but received none, further solidifying the TCO's legitimacy and application.
Key Provisions
The primary operative sections of the Customs Act 1901 (the Act) relevant to this instrument include sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of specific goods. If the application does not pertain to goods specified in section 269SJ, the CEO must evaluate whether it meets the core criteria outlined in section 269C. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO (section 269P).
The Act imposes several obligations and requirements on the parties involved. The CEO must determine whether an application for a TCO meets the core criteria, which include the absence of substitutable goods produced in Australia at the time the application was lodged (section 269C). Additionally, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted (subsection 269K(1)). In this case, no submissions were received.
There are no direct offences or penalties specified in the legislation for breaches related to TCOs. However, if an entity fails to comply with the terms of a TCO or provides false information in an application, they may face legal consequences under other sections of the Customs Act or related legislation, such as misleading or deceptive conduct under the Australian Consumer Law. The maximum penalties for such offences can be significant, depending on the nature and severity of the breach.
Under the Customs Tariff Act 1995, the general rate of duty on the specified goods is 5%, but the TCO reduces this rate to free. Importers of these goods since the TCO's effective date, 16 October 2008, can apply for a refund of the duty paid under paragraph 126(1)(r) of the Regulations. The TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person in respect of actions taken before the registration date.