EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0914305
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.
Outlook Australia applied for a TCO in respect of certain baby snuggle bag pram on 29 April 2009.
Instrument
TCO No 0914305 was made on 24 July 2009. It declares that those certain baby snuggle bag pram 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 7.5%. 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. 0914305 is taken to have come into force on 29 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 Customs Act 1901, enacted by the Australian Parliament, includes provisions that enable the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) under Part XVA. These TCOs provide a reduced rate of customs duty on specific goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0914305, made on 24 July 2009, exemplifies this process. This particular instrument was in response to an application from Outlook Australia for tariff concessions on certain baby snuggle bag prams. The instrument was issued after it was determined that no substitutable goods were produced in Australia, resulting in a duty rate of free for these goods, down from the general rate of 7.5%. The instrument took effect from the date the application was lodged, 29 April 2009, and it does not disadvantage any person or impose any liabilities, ensuring that importers can apply for duty refunds on imports made since the effective date.
Scope and Application
The Tariff Concession Instrument No. 0914305, made under the Customs Act 1901, applies to certain baby snuggle bag prams imported into Australia. The instrument, issued by the Chief Executive Officer of Customs, provides a tariff concession order (TCO) that reduces the customs duty on these goods from the general rate of 7.5% to free, effective from the date the application was lodged, 29 April 2009. The legislation pertains to the import of specified goods that are not substitutable by products manufactured in Australia, thus meeting the core criteria under section 269C of the Act. The TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals or entities. The application of this TCO is limited to the goods specified in the instrument, and it does not extend to other types of goods, as defined by the exclusions in section 269SJ of the Act.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order No. 0914305 under the Customs Act 1901, include sections 269C, 269P, and 269SJ. Section 269C outlines the core criteria for a Tariff Concession Order (TCO), which must be met for the Chief Executive Officer (CEO) of Customs to consider an application for a TCO. This primarily involves ensuring that no substitutable goods are being produced in Australia on the date the application is lodged (section 269C). Section 269P(3) then mandates that if the core criteria are met, the CEO must issue a written TCO, specifying the goods to which the prescribed tariff item applies (section 269P(3)). Additionally, section 269SJ lists the types of goods that cannot be subject to a TCO, providing a framework for what the CEO must avoid when considering an application.
The obligations and requirements imposed by this Act on the parties involved are primarily centred around the application process and the criteria for issuing a TCO. For applicants, such as Outlook Australia in this case, it is essential to ensure that their application meets the core criteria stipulated in section 269C. This includes proving that no substitutable goods are being produced in Australia on the date of the application. The CEO of Customs is obligated to assess each application against these criteria and must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no objections are received, the CEO must proceed to make the TCO as per section 269P(3). The CEO also has a responsibility to ensure that the TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken prior to the TCO's registration date (subsection 269S(1)).
Regarding the consequences of non-compliance or breaches of this legislation, it is important to note that the Act does not specify particular offences or penalties for failing to meet the criteria for a TCO or for any other breaches directly related to the TCO process. However, the general legal framework under which the Customs Act operates could imply that any misrepresentation or false information in an application could lead to administrative penalties or legal action under other relevant laws. The TCO itself ensures that no liabilities are imposed on any person and does not affect the rights of individuals as of the date of registration. Importers, however, are granted the right to apply for a refund of duty on goods imported since the TCO's effective date under paragraph 126(1)(r) of the Regulations, highlighting a benefit rather than a penalty for non-compliance with the tariff provisions.