EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902078
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 laminated scouring pads on 21 January 2009.
Instrument
TCO No 0902078 was made on 17 April 2009. It declares that those certain laminated scouring pads 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. 0902078 is taken to have come into force on 21 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, enacted by the Australian Parliament, provides a framework for the administration of customs and excise duties in Australia. Specifically, Part XVA of the Act facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs, which allow for a reduction in customs duty for specified goods. This mechanism was introduced to address the need for tariff flexibility in cases where certain goods are not produced in Australia, ensuring that Australian consumers and businesses have access to competitively priced goods. The explanatory statement for Tariff Concession Instrument No. 0902078, made under the Customs Act 1901, illustrates this process by detailing the application and approval of a TCO for certain laminated scouring pads, reducing their customs duty from 5% to free. The policy objective is to allow for tariff concessions where no substitutable goods are produced domestically, thereby benefiting importers and potentially consumers through lower prices.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs) provision under Part XVA, facilitates reduced customs duty rates on specified goods where certain conditions are met. These concessions are applicable to goods for which an application has been successfully lodged with the Chief Executive Officer of Customs (CEO) and the application meets the core criteria outlined in section 269C of the Act. Notably, a TCO becomes effective on the day the application is lodged, as stipulated in subsection 269S(1). The scope of the Act encompasses any person or entity seeking tariff concessions for goods that are not specified as ineligible under section 269SJ of the Act and which are not substitutable by goods produced in Australia. This legislative mechanism applies nationally across Australia and is not restricted to specific industries or transactions but rather is open to any goods meeting the eligibility criteria. The Act’s application is further refined through subordinate instruments, which provide detailed definitions and criteria for terms such as "substitutable goods" and "ordinary course of business." The TCO process is transparent, as it requires the CEO to publish notices in the Gazette inviting public submissions on proposed concessions, although in the case of TCO No. 0902078, no such submissions were received.
Key Provisions
The Tariff Concession Instrument No. 0902078, made under the Customs Act 1901, introduces a tariff concession order (TCO) for certain laminated scouring pads, effective from 21 January 2009. Section 269F of the Act allows for the application of a TCO to goods, provided the application does not pertain to goods specified in section 269SJ. The CEO must assess the application against the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)).
The obligations imposed by the Act on entities such as ED Oates Pty Ltd, who applied for the TCO, include submitting a valid application and ensuring that the goods in question do not have Australian-made substitutes. The CEO's obligations include accepting the application if it meets the criteria, publishing a notice in the Gazette inviting submissions (subsection 269K(1)), and making the TCO if no valid submissions are received.
In terms of legal consequences, breaches of the provisions set out in the Act could lead to civil or criminal penalties, although the specific offences and penalties are not detailed within the explanatory statement. However, section 269S(1) of the Act specifies that the TCO will be effective from the date the application was lodged, and it will not affect the rights of any person as at the date of registration, nor impose any liabilities on any person in respect of actions taken prior to the registration. The instrument ensures that importers can apply for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.