EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840264
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.
Feggari Pty Ltd applied for a TCO in respect of certain bath and/or shower glove on 18 November 2008.
Instrument
TCO No 0840264 was made on 06 February 2009. It declares that those certain bath and/or shower glove 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 7.5%. 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. 0840264 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 Customs Act 1901, enacted by the Parliament of Australia, establishes a framework for the application of customs duty on imported goods. One notable provision within this Act is Part XVA, which outlines the process for Tariff Concession Orders (TCOs). These orders, issued by the Chief Executive Officer of Customs, provide for a lower rate of customs duty on specific goods. Feggari Pty Ltd sought a TCO for certain bath and/or shower gloves on 18 November 2008, and the CEO subsequently issued Tariff Concession Order No. 0840264 on 6 February 2009, applying a zero rate of duty to these goods. This order became effective on the date the application was lodged, thereby benefiting importers who could now apply for a refund of duty on goods imported since that date. The CEO's decision was made after satisfying the core criteria, including the absence of substitutable goods produced in Australia, and no objections were received during the consultation period.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs to reduce the rate of customs duty on certain goods. This scheme applies to individuals or entities seeking to import specific goods that are not being produced domestically and that meet the criteria outlined in the Act. The application process involves submitting an application to the CEO, who then evaluates whether the application meets the core criteria, such as the absence of substitutable goods being produced in Australia. If the CEO determines that the application meets these criteria, a TCO is issued, effectively applying a reduced or free duty rate on the specified goods. The scope of the Act is national, as it applies across Australia and is administered by the Commonwealth. However, certain goods are excluded from TCOs, as specified in section 269SJ of the Act. The Act also allows for the extension or restriction of its application through subordinate instruments, which can further define the parameters and specific conditions of TCOs. The TCO process ensures that no person other than the Commonwealth is disadvantaged by the concession, while also providing potential benefits to importers who can seek refunds on duties paid prior to the TCO's effective date.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which provide the framework for the application and processing of Tariff Concession Orders (TCOs). Section 269F allows for the application for a TCO, while section 269C outlines the core criteria that must be met for the application to be approved. Section 269P mandates that if the Chief Executive Officer of Customs (CEO) is satisfied that the application meets these criteria, they must issue a written TCO. The CEO must also consider whether substitutable goods are produced in Australia, as stipulated in section 269C, and if not, proceed to make the TCO.
The Act imposes several obligations on the parties involved. The applicant, in this case, Feggari Pty Ltd, must ensure their application meets the core criteria, such as proving that no substitutable goods are produced in Australia. The CEO has the responsibility of verifying the application against these criteria, consulting with relevant stakeholders if necessary, and publishing a notice in the Gazette inviting submissions from any interested parties. Should the CEO receive submissions, they must consider them before making a final decision. In this instance, no submissions were received, and the CEO proceeded to issue TCO No. 0840264.
In terms of consequences for non-compliance or breach of the Act, it is essential to note that the Act itself does not explicitly detail specific offences, penalties, or civil/criminal consequences for failing to comply with its provisions. However, it is implied that any failure to adhere to the stipulated process for applying for and issuing a TCO could potentially lead to legal challenges or disputes. Additionally, while the Act does not impose liabilities on individuals or entities other than the Commonwealth, it does ensure that the rights of importers are protected, allowing them to apply for duty refunds on goods imported since the TCO came into force. The Act's primary focus is on facilitating tariff concessions for specific goods, rather than penalising non-compliance directly.