EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917964
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.
KAS Australia Pty Ltd applied for a TCO in respect of certain cushion covers on 27 May 2009.
Instrument
TCO No 0917964 was made on 21 August 2009. It declares that those certain cushion covers 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. 0917964 is taken to have come into force on 27 May 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. 0917964 was enacted in 2009 under the Customs Act 1901, to address the need for tariff concessions for specific goods imported into Australia. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) which allow for lower rates of customs duty on certain imported goods, provided they meet specified criteria. The purpose of this legislation is to ensure that Australian importers are not at a competitive disadvantage by virtue of the tariffs imposed on goods that can be produced domestically, provided no such goods are being produced in Australia at the time of the application. The instrument was introduced by the Commonwealth Parliament and aims to support the policy objective of facilitating fair trade practices by providing tariff relief where appropriate.
In this instance, KAS Australia Pty Ltd applied for a tariff concession for certain cushion covers, and the CEO was satisfied that the application met the core criteria. This led to the issuance of TCO No. 0917964, which declares that the specified cushion covers are subject to a free rate of duty, rather than the general rate of 7.5%. The instrument was published in the Gazette with an invitation for public submissions, none of which were received. The TCO is effective from the date the application was lodged, 27 May 2009, and it does not disadvantage any existing rights or impose new liabilities on persons other than the Commonwealth. Importers of these goods can apply for a refund of duty paid on imports since the effective date of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO) to lower the rate of customs duty on certain goods. This applies to individuals or entities that seek to import goods that meet the criteria for a TCO, ensuring that these goods benefit from a reduced duty rate if no substitutable goods are produced in Australia. The CEO must consider applications and ensure they meet the core criteria, such as the absence of substitutable Australian-made goods. Exemptions apply to goods specified in section 269SJ of the Act. The scope of this legislation is national, as it is governed by the Commonwealth and applies across Australia. Any subordinate instruments may further define or refine the application of the TCOs, but the primary Act establishes the foundational principles and criteria. The commencement date of a TCO is the day the application is lodged, ensuring that the benefits are effective immediately upon application submission.
Key Provisions
The key sections of this legislation revolve around the creation and application of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. Section 269C outlines that an application meets the core criteria if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the criteria, they must issue a written TCO. In this case, TCO No. 0917964 was issued on 21 August 2009, declaring that certain cushion covers are subject to a zero rate of customs duty, as no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which are ineligible for a TCO. Additionally, the CEO must assess whether the application meets the core criteria as defined in section 269C. Upon satisfying these conditions, the CEO must issue a TCO, as stipulated in section 269P(3). Furthermore, under subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have reasons why the TCO should not be made.
Breaches of the provisions outlined in the Customs Act 1901 can result in legal consequences. While specific offences and penalties are not detailed in the Explanatory Statement, it is implied that any misuse or non-compliance with the Act’s provisions could lead to legal action. For instance, incorrect application or fraudulent claims for TCOs might result in civil penalties or criminal charges, depending on the severity and intent of the breach. Given that the Act governs customs duties and tariff concessions, penalties could include fines or other sanctions as stipulated by relevant laws.