EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906539
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.
Kid Australia applied for a TCO in respect of certain electrical loom or harness on 25 February 2009.
Instrument
TCO No 0906539 was made on 22 May 2009. It declares that those certain electrical loom or harness 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. 0906539 is taken to have come into force on 25 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 Australian Parliament, provides for a scheme through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislative framework addresses the need to provide tariff relief on certain goods where there is no domestic production of substitutable goods. In this context, TCO No. 0906539 was introduced to grant tariff concessions on specific electrical looms or harnesses. The objective of this particular TCO is to ensure that these goods are subject to a reduced rate of customs duty, specifically reducing it from the general rate of 5% to free, thereby facilitating their importation into Australia. The process involved the consideration of an application by Kid Australia, which led to the issuance of the TCO on 22 May 2009, following the CEO’s satisfaction that no substitutable goods were produced in Australia. The TCO came into effect on 25 February 2009, the date of the application, and no submissions were received in opposition to the concession. This instrument does not disadvantage any person or impose liabilities, and it provides beneficial rights to importers who can apply for refunds of duty paid on these goods since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 0906539, which is made under Part XVA of the Customs Act 1901, applies to specific goods, in this case certain electrical looms or harnesses, for which Kid Australia applied for a Tariff Concession Order (TCO). The Act allows for the CEO of Customs to make a TCO for goods that meet the core criteria, which includes the condition that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. This instrument is effective from the date the application was lodged, 25 February 2009, and it specifies that the general rate of duty for these goods is reduced to free. The TCO does not affect any existing rights or impose any new liabilities on persons other than the Commonwealth, and it provides for a refund of duty for importers of these goods from the date of registration. The CEO is required to publish a notice in the Gazette inviting submissions on the application, though none were received in this instance.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) in this context are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the application meets the core criteria, as specified in section 269C, the CEO is required to make a TCO under section 269P. The TCO is deemed to come into force on the day the application is lodged, according to section 269S. The Act further specifies that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269C).
The Act imposes several obligations on the parties and entities it governs. The CEO is required to determine whether an application for a TCO meets the core criteria (section 269C). If the application is deemed valid, the CEO must make a written TCO (section 269P). Additionally, as soon as practicable after accepting a TCO application as valid, the CEO must publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). The CEO must also ensure that the TCO does not affect the rights of any 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 (subsection 269S(4)).
The Customs Act 1901 does not specify any particular offences, penalties, or civil/criminal consequences for breach in the context of TCOs. However, failure to comply with the requirements of the Act and the associated regulations could potentially result in administrative or legal consequences. For instance, if the CEO fails to properly assess an application for a TCO or makes an order without meeting the statutory criteria, this could lead to the TCO being challenged in court, which could result in the order being overturned. Moreover, any person adversely affected by a TCO could seek a judicial review of the CEO’s decision. While the Act itself does not detail specific penalties, breaches of related regulations could attract fines or other sanctions.