EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840198
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.
Pacific Brands Group Pty Ltd applied for a TCO in respect of certain latex foam shapes on 18 November 2008.
Instrument
TCO No 0840198 was made on 06 February 2009. It declares that those certain latex foam shapes 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. 0840198 is taken to have come into force on 18 November 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. 0840198 was enacted in 2009 under the Customs Act 1901 to provide tariff concessions for certain goods, thereby facilitating trade by reducing customs duties. This instrument was introduced to address the need for a streamlined process in granting tariff concessions to importers, ensuring that goods which are not produced domestically and for which no substitutable goods exist locally can benefit from reduced customs duties. The instrument was enacted by the Chief Executive Officer of Customs, in accordance with the legislative framework established under section 269F of the Customs Act 1901, which allows for the application and assessment of tariff concession orders. The policy objective behind this instrument is to support Australian importers by lowering the cost of importing certain goods, thus promoting competitive pricing and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 0840198, enacted under the Customs Act 1901, applies to entities seeking tariff concessions on imported goods, specifically targeting the reduction of customs duties for certain goods. This legislation is relevant to businesses and individuals who import goods and wish to benefit from lower customs duty rates. The instrument grants relief by allowing the Chief Executive Officer of Customs to issue a Tariff Concession Order (TCO) if the application for tariff concessions meets the specified criteria, such as the absence of substitutable goods being produced in Australia. The TCO affects the importation of certain latex foam shapes, reducing the general duty rate of 5% to free of charge, thereby benefiting importers by potentially reducing their customs duty liabilities on these goods. The application of this Act is confined to the Commonwealth jurisdiction, impacting all importers within Australia.
The Act’s application is further delineated by the requirement that the CEO must publish a notice in the Gazette inviting submissions on the TCO application, although no submissions were received in response to the notice for this particular instrument. The TCO No. 0840198 commenced on the date the application was lodged, 18 November 2008. Importantly, the TCO does not affect the rights of any person in relation to actions taken prior to the registration date, ensuring that it does not impose any liabilities or disadvantages on individuals or entities. The rights of importers are positively impacted, as they can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), include sections 269C, 269B, 269D, 269E, 269F, and 269P. Section 269C outlines the core criteria that a TCO application must meet, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged (s 269C). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the application satisfies the core criteria, the CEO must make a written order (TCO) under section 269P. This order declares that the goods specified in the application are subject to a lower rate of customs duty as prescribed in the Customs Tariff Act 1995. Section 269B provides definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" which are critical in determining the eligibility for a TCO.
The Act imposes several obligations on the parties involved in the TCO process. Firstly, the CEO of Customs must ensure that any TCO application is assessed against the core criteria specified in section 269C. If the application is deemed valid, the CEO must make a written TCO as per section 269P. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit any objections to the making of the TCO, as per subsection 269K(1). The applicant, in this case Pacific Brands Group Pty Ltd, must submit a detailed application for the TCO, including all relevant information that demonstrates the application meets the core criteria. Any person who considers that there are reasons why the TCO should not be made must lodge a submission with the CEO within the timeframe provided.
Failure to comply with the provisions of the Customs Act 1901 can result in various consequences. Although the explanatory statement does not specify particular offences or penalties, breaches of the Act can generally lead to civil or criminal penalties depending on the nature and severity of the breach. For instance, incorrect declarations or fraudulent applications could lead to fines or even imprisonment. The Act also provides that the TCO does not affect the rights of any person except to the extent that it imposes no liabilities on any person in respect of anything done or omitted to be done before the date of registration (subsection 269S(1)). This means that while the TCO may benefit importers by reducing duty rates, it does not retroactively impose any new liabilities or disadvantage any person who acted in good faith prior to the TCO's effective date.