EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902423
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.
Oates Pty Ltd applied for a TCO in respect of certain scouring pads on 21 January 2009.
Instrument
TCO No 0902423 was made on 17 April 2009. It declares that those certain 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. 0902423 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 was enacted to establish a comprehensive framework for the administration and enforcement of customs laws in Australia. The Act, enacted by the Australian Parliament, aims to regulate the import and export of goods, ensuring compliance with customs regulations and facilitating trade. One of the mechanisms introduced by Part XVA of the Act is the scheme for Tariff Concession Orders (TCOs), which allows for the reduction or exemption of customs duty on certain goods under specific conditions. Oates Pty Ltd applied for a TCO on certain scouring pads, seeking a concession on the duty rate applied to these goods. The CEO of Customs determined that the application met the core criteria, leading to the issuance of TCO No. 0902423 on 17 April 2009, which declared that the scouring pads would be subject to a free duty rate. The TCO aims to benefit importers by potentially reducing their customs duty liabilities, while ensuring no adverse impact on existing rights or liabilities as of the application date.
Scope and Application
The Tariff Concession Instrument No. 0902423 made under Part XVA of the Customs Act 1901 applies to the goods specified in the instrument, namely certain scouring pads, and provides for a concession in the rate of customs duty payable on those goods. This Act applies to any person or entity importing these specific goods into Australia. The scope of the Act is limited to the Customs Act 1901, and it operates within the Commonwealth jurisdiction. There are exclusions to the application of this Act as specified in section 269SJ of the Act, which outlines goods that cannot be subject to a Tariff Concession Order (TCO). The application of the Act may be extended or restricted through subordinate instruments, as permitted by the Customs Act 1901. The instrument came into force on 21 January 2009, the date on which the application for the TCO was lodged, and it does not affect any pre-existing rights or liabilities of persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0902423 under the Customs Act 1901 provides a reduction in customs duty for certain scouring pads, as applied by Oates Pty Ltd on 21 January 2009. The CEO of Customs, upon assessing the application, found that no substitutable goods were produced in Australia, satisfying the core criteria as outlined in section 269C of the Act (subsection 269P(3)). Consequently, a Tariff Concession Order (TCO) was issued on 17 April 2009, declaring that these scouring pads would be subject to a duty rate of free, instead of the general rate of 5% (section 269P(3)). The TCO came into effect on the day the application was lodged, which is 21 January 2009 (subsection 269S(1)).
The Act imposes specific obligations on parties applying for a TCO, such as ensuring that the goods in question do not have substitutable equivalents produced in Australia. Section 269C requires the CEO to verify that no substitutable goods were produced in Australia at the time of application. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have objections to the TCO being issued, as per subsection 269K(1). In this instance, no submissions were received, which facilitated the swift issuance of the TCO.
In terms of compliance, the Act does not impose any new liabilities on individuals or entities for actions taken prior to the TCO's registration. Instead, it provides benefits such as the ability for importers to apply for a refund of duty on goods imported since the TCO's effective date (paragraph 126(1)(r) of the Regulations). There are no explicit offences, penalties, or civil/criminal consequences detailed in the explanatory statement for breach of the provisions under this TCO. However, non-compliance with the conditions or misrepresentation in the TCO application could potentially lead to legal repercussions under broader provisions of the Customs Act 1901.