EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908772
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.
Elf Farm Supplies applied for a TCO in respect of certain flooring grids on 16 March 2009.
Instrument
TCO No 0908772 was made on 29 May 2009. It declares that those certain flooring grids 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. 0908772 is taken to have come into force on 16 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. 0908772 was enacted in 2009 as part of the Customs Act 1901, addressing the need for a streamlined process to reduce customs duties on specific goods. This legislation was introduced to facilitate tariff concessions for certain products by allowing the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which can lower the duty rates on eligible goods. This was intended to support the economic viability of importing these goods by making them more competitively priced against locally produced alternatives, thereby benefiting importers and potentially the broader market. The policy objective underpinning this legislation is to encourage trade by reducing the financial burden on importers, thus fostering a more competitive and dynamic marketplace.
The instrument was implemented without any objections after an invitation for submissions was published in the Gazette, indicating broad acceptance of the tariff concession for the specified flooring grids. The TCO No. 0908772 came into force on 16 March 2009, the date Elf Farm Supplies applied for the concession. This instrument ensures that the rights of importers are positively affected, allowing them to apply for duty refunds on goods imported since the effective date of the TCO, without imposing any liabilities on non-Commonwealth entities.
Scope and Application
The Tariff Concession Instrument No. 0908772 under the Customs Act 1901 applies to any individual or entity that imports goods specified in the Instrument, which in this case are certain flooring grids. The Act facilitates tariff concessions on these goods by reducing or eliminating customs duty, provided the application meets specific criteria set out in the legislation. The scope of the Act extends across the Commonwealth of Australia and applies to all entities involved in the importation of the specified goods. The Act does not apply to goods listed in section 269SJ of the Customs Act 1901, which outlines goods that cannot be subject to a Tariff Concession Order. The Instrument was made by the Chief Executive Officer of Customs on 29 May 2009, following an application by Elf Farm Supplies on 16 March 2009, and it came into force on the date the application was lodged. The Instrument does not affect any rights of persons other than the Commonwealth and does not impose any liabilities on persons for actions taken prior to the registration of the Instrument.
Key Provisions
The Tariff Concession Instrument No. 0908772, made under the Customs Act 1901, pertains to a specific set of flooring grids. Section 269F of the Act enables an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in relation to certain goods. Upon receiving an application, the CEO must determine whether it meets the core criteria outlined in section 269C of the Act. This involves verifying that, on the date the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are satisfied, the CEO is required to issue a written order (TCO) that specifies the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, as per subsection 269P(3). In this case, the CEO determined that the application met the criteria and issued a TCO for the specified flooring grids, aligning them with item 50 of Schedule 4, resulting in a duty rate of free, down from the general rate of 5%.
The Act imposes several obligations on both the CEO and the applicants. For the CEO, these include assessing the validity of the application against the core criteria and ensuring that any potential objections are considered. This involves publishing a notice in the Gazette (subsection 269K(1)) inviting submissions from any person who believes the TCO should not be made. In this instance, no objections were received. The applicant, on the other hand, must provide sufficient information to demonstrate that the application meets the core criteria and that no substitutable goods are produced in Australia. Elf Farm Supplies fulfilled this requirement by providing adequate evidence to support their application for the flooring grids.
Breaches of the provisions under the Customs Act 1901 may lead to various consequences. While the specific Act does not detail offences or penalties in the explanatory statement, general provisions within the Act and associated regulations might apply. For instance, section 278 of the Customs Act 1901 allows for prosecution and penalties for fraudulent or misleading conduct related to customs matters. The severity of penalties can vary significantly depending on the nature and extent of the breach, with potential criminal penalties for serious offences and civil penalties for lesser infractions. The Act also includes provisions for the recovery of duties and charges, as well as interest on unpaid amounts, which could further compound the financial repercussions of non-compliance.