EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0905675
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.
Watermark Trading Australia applied for a TCO in respect of certain bodyboards on 19 February 2009.
Instrument
TCO No 0905675 was made on 15 May 2009. It declares that those certain bodyboards 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. 0905675 is taken to have come into force on 19 February 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 Commonwealth Parliament, establishes a framework for the imposition of customs duties, including provisions for Tariff Concession Orders (TCOs). The 2009 Tariff Concession Instrument No. 0905675 addresses the issue of providing tariff concessions for specific goods, thereby facilitating trade and reducing import costs. This instrument was introduced to ensure that goods for which no substitutable Australian-produced alternatives exist are subject to preferential tariff treatment. The objective is to promote the economic efficiency of the Australian market by encouraging the importation of goods where domestic production is not viable, thus benefiting importers and consumers by lowering the cost of such goods. The Tariff Concession Order No. 0905675, concerning certain bodyboards, was made effective from the date of application, 19 February 2009, and provides for these goods to be subject to a zero rate of duty, significantly reducing the financial burden on importers.
Scope and Application
The Customs Act 1901, as amended and extended through Tariff Concession Orders (TCOs), applies to goods that are subject to a concession on customs duty as determined by the Chief Executive Officer of Customs. This Act pertains to any entity or individual involved in the importation of specified goods that qualify for a reduced tariff under a TCO. The scope of the Act includes the process of applying for and the issuance of TCOs for goods that are not being produced domestically and are not listed in section 269SJ of the Act as ineligible for tariff concessions. Geographically, the application of the Act is federal, operating under the authority of the Commonwealth of Australia. The Act does not specify exclusions or exemptions beyond those stipulated in section 269SJ, which lists goods such as firearms, tobacco products, and certain alcoholic beverages as ineligible for TCOs. The Act may extend its application through subordinate instruments, which are used to specify the detailed criteria for goods eligible for tariff concessions and to outline the process for making and administering TCOs.
Key Provisions
The key provisions of the Customs Act 1901, as amended by Tariff Concession Instrument No. 0905675, establish a framework for the creation of Tariff Concession Orders (TCOs). These orders apply a reduced rate of customs duty to specified goods, provided certain criteria are met (s 269F). The Chief Executive Officer of Customs (CEO) is responsible for making these orders (s 269P(3)). The instrument specifically addresses applications for concessions on bodyboards, where the duty rate is set at zero, rather than the general rate of 5% (s 269P(3)).
Entities or individuals seeking to benefit from these tariff concessions must apply to the CEO for a TCO (s 269F). The CEO is obligated to ensure that the application does not pertain to goods listed in section 269SJ of the Act, which are ineligible for TCOs (s 269P(3)). The CEO must also verify that no substitutable goods were produced in Australia on the day the application was lodged, as stipulated in section 269C of the Act. Definitions for key terms like "substitutable goods" and "ordinary course of business" are provided in sections 269D and 269E, respectively.
Upon acceptance of a valid application, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO (s 269K(1)). In this case, no submissions were received in response to the notice. Once the CEO issues a TCO, it is deemed to have come into effect on the date the application was lodged (s 269S(1)). Importantly, the TCO does not retroactively disadvantage any person, nor does it impose liabilities for actions taken prior to its issuance (s 269S(1)). Importers of the affected goods will have the right to apply for a refund of duties paid since the effective date of the TCO, as outlined in paragraph 126(1)(r) of the Regulations.
Failure to comply with the requirements of the Customs Act 1901 and its associated regulations can lead to various legal consequences. Offences under the Act may result in both civil and criminal penalties. For instance, knowingly making a false statement in an application for a TCO can lead to a fine of up to 10,000 penalty units or imprisonment for up to five years, or both (s 269P(3)). Additionally, any person who wilfully contravenes a provision of the Act may be subject to fines and penalties as prescribed by the Act, which can be significant depending on the nature and severity of the offence. These provisions underscore the importance of adherence to the legal framework governing tariff concessions to avoid potential legal repercussions.