EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917967
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 0917967 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. 0917967 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 Customs Act 1901, enacted by the Australian Parliament, introduced a framework for the creation of Tariff Concession Orders (TCOs) to address the need for tariff relief for specific goods. The Act allows the Chief Executive Officer of Customs to reduce customs duties on goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. This mechanism aims to encourage the importation of specific goods that are not locally produced, thereby supporting market access and potentially lowering consumer prices. Tariff Concession Instrument No. 0917967 was introduced to provide tariff concessions for certain cushion covers, reducing their duty from 7.5% to free, effective from the date of the application. This measure was taken after consultation and no objections were raised, ensuring that the rights of existing parties were not adversely affected.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the procedure for the creation of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This legislation allows for reduced customs duty rates on specified goods, provided that certain conditions are met. The Act applies to any person or entity seeking a tariff concession for goods that are not prohibited from such concessions under section 269SJ. The process involves an application to the CEO, followed by an evaluation to determine if the application meets the core criteria, primarily that no substitutable goods are being produced in Australia at the time of application. If these criteria are satisfied, the CEO is mandated to issue a TCO, which specifies the new duty rate for the goods. The geographic reach of this Act is national, as it pertains to imports across Australia. The Act does not specify any exclusions beyond those outlined in section 269SJ, and the application of the Act can be extended or clarified through subordinate instruments, such as regulations or further explanatory statements.
Key Provisions
The Customs Act 1901, through Part XVA, establishes a framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO) (section 269F). A TCO application can be submitted by any person, and if the CEO determines that the application pertains to goods not listed in section 269SJ and meets the core criteria in section 269C, a TCO can be issued. Section 269C stipulates that an application meets the core criteria if, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. Definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F, respectively.
The obligations imposed by the Act on parties or entities governed by it include the requirement for the CEO to review TCO applications against the core criteria and to ensure that they do not pertain to goods that cannot be the subject of a TCO under section 269SJ. Once a TCO application is accepted as valid, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections (subsection 269K(1)). If no objections are received, the CEO is required to issue a TCO if the application meets the core criteria. Additionally, section 269P(3) mandates that the CEO must make a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
Failure to comply with the requirements of the Customs Act 1901, including submitting false information in a TCO application or circumventing the provisions of a TCO, may result in criminal or civil penalties. For instance, providing false or misleading information to the CEO with the intent to obtain a TCO or otherwise deceive the CEO can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both (subsection 269T(1)). In civil proceedings, a person who has suffered loss or damage due to a breach of the Act can seek damages or an injunction. The specific penalties and consequences for breach are detailed in the relevant sections of the Act and associated regulations.