EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902959
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.
Salton applied for a TCO in respect of certain cooking sets on 29 January 2009.
Instrument
TCO No 0902959 was made on 24 April 2009. It declares that those certain cooking sets 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. 0902959 is taken to have come into force on 29 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 by the Parliament of Australia to regulate customs duties and provide a framework for the administration of customs and excise. The Tariff Concession Instrument No. 0902959, introduced in 2009, addresses the need to provide tariff concessions on specific goods, thereby facilitating trade by lowering customs duties for certain imported goods. The instrument was developed in response to an application from Salton, which sought tariff concessions for certain cooking sets. The Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria outlined in section 269C of the Act. As a result, Tariff Concession Order No. 0902959 was issued, declaring that the specific cooking sets are subject to a free rate of duty instead of the general rate of 5%. The policy objective is to encourage the import of these goods by reducing the financial burden on importers, thereby potentially increasing their availability in the Australian market.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This mechanism allows for the application of a lower rate of customs duty on certain goods, subject to specific conditions being met. The Act applies to any person or entity that seeks to apply for a TCO for goods not specified in section 269SJ of the Act, which outlines goods that cannot be subject to a TCO. The application process involves the applicant satisfying the core criteria, notably that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Once the CEO is satisfied that the application meets these criteria, a TCO is issued, effectively applying a prescribed rate of duty from the date the application was lodged. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on persons other than the Commonwealth in respect of actions taken before the TCO’s registration. Importers of the affected goods will benefit from the TCO as they may apply for a refund of duty on goods imported since the date the TCO is taken to have come into force.
Key Provisions
The primary sections of this legislation (sections 269C, 269B, 269D, 269E, and 269P) detail the criteria for the application and approval of Tariff Concession Orders (TCOs). An applicant, such as Salton, can request a TCO for specific goods by applying to the Chief Executive Officer (CEO) of Customs. The CEO must then determine whether the application meets the core criteria, specifically that no substitutable goods were produced in Australia at the time of application (section 269C). If the CEO is satisfied, they must issue a TCO, specifying that the goods in question are subject to a lower rate of customs duty, as outlined in the Customs Tariff Act 1995 (section 269P(3)). For Salton's application, concerning certain cooking sets, the CEO determined that no substitutable goods were produced in Australia, leading to the issuance of TCO No. 0902959 on 24 April 2009.
The Act imposes several obligations on both the applicant and the CEO. For the applicant, the primary obligation is to submit a valid application to the CEO, ensuring that the goods specified meet the criteria for a TCO (section 269F). The CEO, on the other hand, has the duty to assess the application against the core criteria and, if satisfied, to issue a TCO (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the TCO (subsection 269K(1)). In this instance, no submissions were received, which facilitated the issuance of TCO No. 0902959.
The Act does not explicitly outline offences or penalties for breach; however, it does detail the consequences of contravening the provisions. If an applicant makes a false or misleading statement in their application, they may face legal consequences under the applicable laws, though these are not specified within the text. Similarly, if the CEO fails to properly assess an application or to publish the required notice in the Gazette, they may be subject to internal departmental scrutiny or other administrative actions. The TCO itself does not impose any liabilities on any person, as outlined in subsection 269S(1), ensuring that the rights of importers are beneficially affected and that they can apply for a refund of duty on goods imported since the TCO came into force.