EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0901724
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.
Anaconda Stores Pty Ltd applied for a TCO in respect of certain sleeping bags on 19 January 2009.
Instrument
TCO No 0901724 was made on 14 April 2009. It declares that those certain sleeping bags 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. 0901724 is taken to have come into force on 19 January 2009.
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, amended by Tariff Concession Instrument No. 0901724, provides a framework for the Chief Executive Officer of Customs to grant tariff concessions on certain imported goods, thereby addressing the need for reducing customs duties on specific items. Enacted by the Australian Government, the Act aims to facilitate smoother trade by reducing duty burdens on goods for which no Australian-made alternatives exist, thus encouraging imports of non-domestically produced goods. The policy objective is to enhance trade efficiency and potentially lower costs for consumers by allowing duty-free importation of these specific goods.
The instrument, made under section 269F of the Customs Act, was introduced to respond to an application by Anaconda Stores Pty Ltd for tariff concessions on certain sleeping bags. The CEO determined that these sleeping bags could qualify for a reduced duty rate, given the absence of substitutable goods produced in Australia. This decision was based on the criteria outlined in sections 269C, 269B, and 269D of the Act, ensuring that the application met the necessary conditions. Consequently, the tariff on these sleeping bags was set to zero, effective from the date of the application, 19 January 2009.
Scope and Application
The Customs Act 1901, through Tariff Concession Orders (TCOs), facilitates the application for tariff concessions on specified goods, allowing for a lower rate of customs duty. This Act applies to any person or entity that wishes to apply for tariff concessions on goods that are not substitutable by any goods produced in Australia in the ordinary course of business. The Act operates within the Commonwealth jurisdiction and applies to all territories and states in Australia. Notably, certain goods specified in section 269SJ of the Act are excluded from the tariff concession scheme, such as those goods that are subject to specific prohibitions or restrictions. The application process requires an individual or entity to apply to the Chief Executive Officer of Customs, who must then assess whether the application meets the core criteria outlined in section 269C of the Act. If satisfied, the CEO issues a written order, which takes effect from the date the application was lodged. The TCO does not retroactively affect the rights of any person and imposes no liabilities on individuals or entities other than the Commonwealth.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0901724, which is based on the Customs Act 1901 (the Act), establish a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (the CEO) (sections 269F, 269C, 269B, and 269P(3)). A TCO application can be submitted by a person to the CEO for a lower rate of customs duty on certain goods, provided these goods are not listed in section 269SJ of the Act (section 269F). If the CEO determines that the application meets the core criteria, which include the absence of substitutable goods produced in Australia in the ordinary course of business (sections 269C and 269D), the CEO is obligated to issue a TCO. This specific TCO, number 0901724, pertains to certain sleeping bags and declares that these goods are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, effectively granting them a duty-free status (section 269P(3)). The general rate of duty for these goods is 7.5%, but the TCO reduces this to zero (section 269P(3)).
The Act imposes several obligations on the parties involved in the TCO process. The CEO must ensure that a TCO application meets the core criteria before issuing a TCO (section 269C). Additionally, the CEO is required to publish a notice in the Gazette once a TCO application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not proceed (subsection 269K(1)). The CEO must also consider any submissions received and decide whether to issue the TCO (subsection 269K(1)). In this instance, no submissions were received, allowing the TCO to proceed without objection (subsection 269K(1)).
Any breach of the requirements or conditions set out in the Act or the TCO could lead to various consequences. Although the explanatory statement does not explicitly detail offences or penalties, the Customs Act 1901 generally includes provisions for enforcement and penalties for non-compliance. These can include fines and imprisonment for serious breaches, as well as civil penalties for less severe infractions. The maximum penalties would depend on the specific nature of the breach and the relevant sections of the Act and any associated regulations. It is also worth noting that the TCO itself does not impose any liabilities on any person other than the Commonwealth (subsection 269S(1)).