EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0906802
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.
Ariston Table Tennis Sales applied for a TCO in respect of certain table tennis sets on 26 February 2009.
Instrument
TCO No 0906802 was made on 22 May 2009. It declares that those certain table tennis 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. 0906802 is taken to have come into force on 26 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 Tariff Concession Instrument No. 0906802, enacted in 2009, is an amendment to the Customs Act 1901, designed to address the need for a streamlined process to grant tariff concessions for specific goods. This instrument was introduced to facilitate tariff concessions for goods not produced domestically, ensuring they receive preferential customs duty rates. The instrument was enacted by the Chief Executive Officer of Customs (CEO), who is empowered to make Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. The objective of this legislation is to support businesses by lowering the customs duty on imported goods, provided that no substitutable goods are produced in Australia, thereby fostering fair trade practices and encouraging imports where local production is not feasible.
The instrument was introduced following an application by Ariston Table Tennis Sales for tariff concessions on certain table tennis sets. After evaluating the application, the CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria under section 269C of the Customs Act 1901. Consequently, a TCO was issued, granting these goods a zero percent duty rate, down from the general rate of five percent. This concession came into effect on the date of the application, 26 February 2009, without affecting the rights of any party under existing laws. Importers of these goods can now apply for a refund of duty paid before the TCO came into force, enhancing their financial position without incurring any new liabilities.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 0906802, applies to persons or entities seeking tariff concessions on imported goods. Specifically, it pertains to those applying for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs, provided the goods in question are not specified in section 269SJ of the Act and meet the criteria outlined in section 269C. The scope of this Act extends to ensuring that the goods subject to the TCO are not substitutable by Australian-produced goods and are not used in the ordinary course of business in Australia. The geographic reach of the Act is national, as it applies to all imports into Australia under the Customs Act 1901. The Act’s application is further extended or restricted by subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable tariff schedules. The TCO No. 0906802, which came into force on 26 February 2009, provides for a zero rate of duty on certain table tennis sets, thus benefiting importers by potentially allowing them to claim a refund of duty on goods imported since the TCO's effective date, without imposing any new liabilities.
Key Provisions
The key operative sections of this legislation (section 269C, 269F, 269K, and 269S) establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application is valid and meets the core criteria set out in section 269C, the CEO must make a written order that declares the goods to which the concession applies (section 269P). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties (section 269K). The TCO is considered to have come into force on the day the application was lodged (section 269S).
The Act imposes several obligations on the parties involved. The applicant must ensure that the goods for which they are seeking a TCO are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must assess whether the application meets the core criteria, specifically whether no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties (section 269K). The CEO must decide whether to make the TCO based on the application and any submissions received.
Failure to comply with the requirements of the Customs Act 1901 can result in civil or criminal penalties. Under section 269Q, the CEO may cancel a TCO if they are satisfied that the conditions of the order have not been met or if the concession is no longer warranted. The Act does not specify maximum penalties for breaches but general provisions under the Customs Act may apply, including fines and imprisonment. Importers who fail to apply for a refund of duty under the Tariff Concession Instrument may also face civil consequences, such as the loss of their entitlement to a refund.
This legislation ensures that TCOs are granted fairly and transparently, with opportunities for interested parties to provide input. The rights of importers are protected, and they may benefit from reduced duty rates on eligible goods. The Act also provides mechanisms for the CEO to monitor and enforce compliance with the terms of TCOs, ensuring that the concessions are not abused or misused.