EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0908866
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.
Anasazi Trading applied for a TCO in respect of certain household articles on 13 March 2009.
Instrument
TCO No 0908866 was made on 29 May 2009. It declares that those certain household articles 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. 0908866 is taken to have come into force on 13 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 Customs Act 1901 was enacted to provide a framework for the regulation of customs duties and other charges on imported and exported goods. It established the mechanism by which Tariff Concession Orders (TCOs) can be applied, allowing for tariff concessions on certain goods that meet specific criteria. Enacted by the Parliament of Australia, the Act aims to facilitate trade by providing tariff relief where appropriate, thereby promoting economic efficiency and competitive advantage. Tariff Concession Instrument No. 0908866, made under the Customs Act, was introduced to provide a tariff concession on certain household articles. This was in response to an application by Anasazi Trading on 13 March 2009, where the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, thereby meeting the core criteria for a tariff concession. The instrument was made on 29 May 2009 and took effect from the date of the application, providing a zero percent duty rate on the specified household articles, which contrasts with the general rate of 5%.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the Chief Executive Officer (CEO) of Customs to issue Tariff Concession Orders (TCOs) that apply reduced customs duty rates on specific goods. This Act applies to any person or entity seeking to import goods eligible for tariff concessions, provided that the goods are not specified in section 269SJ as ineligible. The application process requires that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business, as defined by sections 269C, 269D, 269E and 269F of the Act. The CEO must satisfy the core criteria, including the absence of Australian-produced substitutable goods, before issuing a TCO. Once a TCO is issued, it applies to the goods specified from the date the application was lodged. The CEO is mandated to publish a notice in the Gazette inviting objections to the proposed TCO, though in the case of TCO No. 0908866, no submissions were received. The TCO does not affect any existing rights or impose liabilities on persons other than the Commonwealth, and benefits importers by allowing them to apply for duty refunds on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901, particularly under Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) (s 269F). A TCO applies a reduced rate of customs duty to specified goods, provided certain criteria are met. For instance, if an applicant like Anasazi Trading applies for a TCO, the CEO must consider whether the application meets the core criteria, including ensuring that no substitutable goods are produced in Australia (s 269C). If satisfied, the CEO issues a written order (TCO) (s 269P(3)). In the case of TCO No. 0908866, certain household articles were declared to be subject to a zero rate of duty, differing from the usual 5% rate (Schedule 4, Customs Tariff Act 1995).
The Act imposes specific obligations on both the applicant and the CEO. The applicant must ensure that their application is valid and meets the criteria outlined in the Act. For example, Anasazi Trading must verify that no substitutable goods are being produced in Australia. The CEO has the responsibility to assess the application, publish a notice in the Gazette inviting submissions, and decide on the application's validity (s 269K(1)). If the CEO is satisfied with the application, they must issue a TCO (s 269P(3)).
Failure to comply with the requirements set out in the Customs Act 1901 can result in various consequences. While the Explanatory Statement does not explicitly outline specific offences or penalties, breaches of the Act could potentially lead to civil or criminal penalties. For instance, incorrect declarations or fraudulent applications might be subject to fines or legal action. It is also important to note that any liabilities imposed by a TCO do not affect the rights of persons other than the Commonwealth in respect of actions taken before the TCO's registration date (s 269S(1)). Importers can benefit from the TCO by applying for duty refunds on goods imported since the TCO's effective date (Regulations, para 126(1)(r)).