EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0912799
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.
Spartan Sporting Goods applied for a TCO in respect of certain aerobic or anaerobic exercise machine on 17 April 2009.
Instrument
TCO No 0912799 was made on 10 July 2009. It declares that those certain aerobic or anaerobic exercise machine 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. 0912799 is taken to have come into force on 17 April 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. 0912799 was enacted in 2009 under the Customs Act 1901, aiming to address the issue of providing tariff concessions for specific goods that are not produced domestically and thereby ensuring fair competition for Australian businesses. The instrument was introduced by the Commonwealth Government and is designed to facilitate the application process for tariff concessions, ultimately supporting economic growth by making imported goods more affordable and accessible. Spartan Sporting Goods' application for a tariff concession on certain aerobic or anaerobic exercise machines was processed under this instrument, which was implemented to ensure that no substitutable goods were produced in Australia, thereby meeting the core criteria set out in the Act. This legislative measure was intended to benefit importers by potentially allowing them to apply for a refund of duty on goods imported since the date the tariff concession was taken to have come into effect.
Scope and Application
The Tariff Concession Instrument No. 0912799, made under the Customs Act 1901, applies to specific aerobic or anaerobic exercise machines, establishing a tariff concession order (TCO) for these goods. This Act allows the Chief Executive Officer of Customs to implement lower customs duty rates on certain goods when specific conditions are met, particularly when no substitutable goods are produced in Australia. The instrument in question was applied for by Spartan Sporting Goods on 17 April 2009 and was made on 10 July 2009, effectively from the date of the application. The geographic reach of this Act is national, applying across Australia. The TCO applies to the goods specified in the instrument and does not extend to other goods not covered by this particular order. There are no stated exclusions or exemptions in the Act for this specific TCO, although section 269SJ of the Act outlines goods that cannot be subject to a TCO. The Act allows for the extension or restriction of its application through subordinate instruments, ensuring that the scheme remains flexible and responsive to changing economic and commercial conditions.
Key Provisions
The Customs Act 1901, particularly in Part XVA, outlines the process through which Tariff Concession Orders (TCOs) can be established by the Chief Executive Officer of Customs (CEO) (s 269F). A TCO results in a reduced customs duty for goods that fall under its purview. To apply for a TCO, an individual or entity must submit an application to the CEO, who then assesses if the application pertains to goods that are ineligible under section 269SJ of the Act (s 269C). If the application does not involve ineligible goods, the CEO further examines whether it satisfies the core criteria outlined in section 269C. This requires that, on the date the application was filed, no substitutable goods were produced in Australia in the ordinary course of business (s 269P(3)). If the CEO is satisfied with the application, they must issue a TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods (s 269P(3)).
The obligations imposed by the Act on the parties involved include the requirement for the CEO to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid (s 269K(1)). This notice invites any person who believes there are reasons why the TCO should not be made to submit their views to the CEO. In the case of TCO No. 0912799, the CEO did not receive any submissions in response to the Gazette notice. Additionally, the CEO must ensure that the TCO does not disadvantage any person or impose liabilities on them in respect of anything done or omitted to be done before the date of registration (s 269S(1)). TCO No. 0912799, concerning certain aerobic or anaerobic exercise machines, is taken to have come into force on 17 April 2009, the date the application was lodged.
The Customs Act 1901 does not explicitly outline specific offences or penalties for breaches of the TCO provisions. However, general compliance with the Act and its regulations is crucial. Failure to comply with the Act's requirements or to adhere to the terms of a TCO could potentially lead to civil or criminal consequences under other sections of the Act. For instance, knowingly making a false statement in connection with the importation of goods or attempting to evade customs duty could result in penalties as outlined in other sections of the Customs Act. The penalties for such offences can include fines and imprisonment, depending on the severity and intent of the breach.