EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0909072
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.
Five Star Quality Products applied for a TCO in respect of certain tablecovers and or tableskirts on 17 March 2009.
Instrument
TCO No 0909072 was made on 29 May 2009. It declares that those certain tablecovers and or tableskirts 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. 0909072 is taken to have come into force on 17 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. 0909072 was enacted under the Customs Act 1901 to address a specific problem: the need for tariff concessions on certain goods imported into Australia. This instrument was introduced to provide relief by reducing or eliminating customs duty on specified goods, in this case, certain tablecovers and tableskirts, to promote fair trade practices and support industries that cannot compete domestically with imported goods. The instrument was developed and enacted by the Chief Executive Officer of Customs, following a valid application by Five Star Quality Products on 17 March 2009. The policy objective behind this instrument is to ensure that Australian businesses are not unduly disadvantaged by the presence of imported goods that can be produced domestically, thereby fostering a balanced and competitive market environment. The instrument came into force on the date the application was lodged, 17 March 2009, and no submissions were received opposing the concession.
Scope and Application
The Tariff Concession Instrument No. 0909072 under the Customs Act 1901 applies to specific goods, namely certain tablecovers and tableskirts, which are now subject to a lower rate of customs duty as declared by the Chief Executive Officer of Customs. This application of tariff concessions is aimed at goods that are imported into Australia and fall under the purview of the Customs Tariff Act 1995. The Act applies to any person who imports these specified goods, and the concessions come into effect from the date the application was lodged, in this case, 17 March 2009. The CEO of Customs must ensure that no substitutable goods were produced in Australia at the time the application was made, which was satisfied in this instance, leading to the application of a zero rate of duty on the specified items. Importantly, the legislation does not affect any existing rights of individuals or entities other than the Commonwealth and does not impose any liabilities on any person, thereby protecting existing rights and obligations of importers and other stakeholders.
Key Provisions
The main operative sections of the Customs Act 1901, specifically under Part XVA, concern the establishment and approval of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P). 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 meets the core criteria specified in section 269C, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed rate of customs duty as specified in Schedule 4 of the Customs Tariff Act 1995. For example, in TCO No. 0909072, certain tablecovers and tableskirts were declared to be subject to a free rate of duty instead of the general rate of 5%.
The Act imposes specific obligations on both applicants and the CEO of Customs. Applicants must ensure their applications meet the core criteria, which include demonstrating that no substitutable goods are produced in Australia on the day the application is lodged (section 269C). The CEO, on their part, is required to review the application and make a decision based on whether it meets the core criteria. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO within a specified timeframe (subsection 269K(1)). In the case of TCO No. 0909072, the CEO did not receive any submissions opposing the TCO.
The Act also outlines the potential consequences for breaches of its provisions. However, the Explanatory Statement does not explicitly state any offences, penalties, or civil/criminal consequences related to TCOs. Generally, breaches of the Customs Act 1901 may result in penalties under the Act, which can include fines and imprisonment. For instance, under section 224 of the Act, a person found guilty of an offence may be fined up to 10,000 penalty units or imprisoned for up to five years, or both, for serious offences. Although the specific penalties for TCO-related breaches are not detailed in the provided text, they would likely follow the general penalty framework set out in the Customs Act 1901.