EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908498
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.
Kathmandu Pty Ltd applied for a TCO in respect of certain backpacks on 12 March 2009.
Instrument
TCO No 0908498 was made on 29 May 2009. It declares that those certain backpacks 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. 0908498 is taken to have come into force on 12 March 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. 0908498, enacted in 2009, pertains to the Customs Act 1901 and aims to address the issue of providing tariff concessions for specific goods, enhancing their competitiveness in the Australian market. The Customs Act 1901 established a framework whereby the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that apply lower rates of customs duty to specified goods. Kathmandu Pty Ltd's application for a TCO concerning certain backpacks was approved as no substitutable goods were being produced in Australia, thereby meeting the core criteria under the Act. This concession is intended to benefit importers by allowing them to apply for a refund of duty on goods imported since the effective date of the TCO, without imposing any new liabilities. The instrument ensures that the rights of importers are advantageously affected without disadvantaging any other parties as of the date of registration.
Scope and Application
The Customs Act 1901, under its Part XVA, facilitates the application of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, with the aim of granting lower customs duty rates on specified goods. This mechanism is available to any person who applies for a TCO in relation to goods not listed in section 269SJ of the Act, provided that the goods are not substitutable by products manufactured in Australia. A TCO application is considered valid if, at the time of application, no substitutable goods are being produced domestically for commercial use. The application process includes a requirement for the CEO to publish a notice in the Gazette, inviting submissions from interested parties, although no submissions were received in this instance. The TCO's effective date aligns with the application date, meaning it retroactively applies to the date the application was lodged. Notably, this legislative instrument does not alter the rights or impose liabilities on any parties in respect of actions taken before the TCO's effective date. Instead, it benefits importers by allowing them to seek duty refunds on eligible goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 0908498, under the Customs Act 1901, allows for a reduced rate of customs duty on specific goods. Section 269F enables an application for a Tariff Concession Order (TCO) to be submitted to the Chief Executive Officer (CEO) of Customs. If the CEO determines that the application meets the criteria in section 269C, which requires that no substitutable goods are produced in Australia on the day the application is lodged, a TCO is issued. Section 269P(3) mandates that the CEO must then make a written order specifying the applicable duty rate.
The obligations under this Act primarily rest on the applicant and the CEO of Customs. The applicant must ensure their application complies with the core criteria outlined in section 269C, and the CEO must review the application to confirm it meets these criteria and publish a notice in the Gazette inviting submissions from any interested parties. In this case, the CEO did not receive any submissions in response to the published notice, which was a requirement under subsection 269K(1).
In terms of consequences for breach, the Act does not explicitly state offences or penalties for failing to comply with the requirements of a TCO. However, any misuse or non-compliance with the terms of the TCO could potentially lead to legal actions under other relevant sections of the Customs Act 1901 or related legislation. The Act ensures that the rights of importers are protected and that they can apply for a refund of duty on goods imported since the TCO was taken to have come into force, as per paragraph 126(1)(r) of the Regulations.