EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917970
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 0917970 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. 0917970 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 Order No. 0917970, enacted under the Customs Act 1901, addresses the need for concessional customs duty rates for specific goods, in this case, certain cushion covers, when it is determined that no substitutable goods are produced in Australia. This instrument was introduced to provide tariff relief to importers and consumers by reducing the duty rate on these cushion covers from the general rate of 7.5% to free. The Customs Act 1901, as amended, allows the Chief Executive Officer of Customs to make such orders if certain criteria are met, ensuring that the application of tariff concessions is both fair and economically beneficial. The instrument was made effective from the date the application was lodged, 27 May 2009, and does not adversely affect the rights of any person other than the Commonwealth. This legislative action aims to streamline the importation process and reduce costs for businesses and consumers alike.
Scope and Application
The Tariff Concession Instrument No. 0917970 under the Customs Act 1901 pertains to the application of a Tariff Concession Order (TCO) for certain cushion covers, reducing the customs duty from 7.5% to free. This Act applies to any person or entity seeking a tariff concession for goods that are not produced in Australia and have no substitutable goods available domestically. The scope of this legislation is specifically tailored to goods for which an application has been made and approved by the Chief Executive Officer of Customs, provided the application meets the core criteria outlined in the Act. The geographical application of the Act is national, extending across Australia as it is a Commonwealth Act. However, the Act does not provide specific exclusions or exemptions, apart from those goods listed in section 269SJ of the Customs Act, which are ineligible for tariff concessions. The Act's application may be further extended or restricted through subordinate instruments, although no such instruments are referenced in the explanatory statement.
Key Provisions
The Tariff Concession Instrument No. 0917970 under the Customs Act 1901 (section 269F) establishes a lower rate of customs duty for certain cushion covers through the issuance of a Tariff Concession Order (TCO). The instrument was made on 21 August 2009 by the Chief Executive Officer of Customs (CEO), following an application from KAS Australia Pty Ltd on 27 May 2009. The general rate of duty on these goods is 7.5%, but under the TCO, the rate is set to free (section 269P(3)).
The operative sections of the legislation, particularly section 269C, require that for a TCO application to meet the core criteria, no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged. The definitions of key terms such as "goods produced in Australia" (section 269D), "ordinary course of business" (section 269E), and "substitutable goods" (section 269D) are also critical in determining the eligibility of the goods for a TCO. The CEO must make a written order (TCO) if satisfied that the application meets these criteria.
The obligations imposed by the Act on the parties it governs include the requirement for the CEO to publish a notice in the Gazette once a TCO application is accepted as valid (subsection 269K(1)). This notice invites any person who believes the TCO should not be made to submit their reasons to the CEO. In this case, no submissions were received. The TCO itself comes into force on the day the application was lodged (subsection 269S(1)), which for TCO No. 0917970 is 27 May 2009. The TCO does not affect any rights of a person as at the date of registration and does not impose any liabilities on any person, except for the Commonwealth.
Failure to comply with the requirements of the Customs Act 1901 could lead to civil or criminal consequences. For instance, knowingly making a false statement in an application for a TCO could result in penalties. Under section 284-10 of the Act, a person found guilty of an offence against the Act may be liable to a fine of up to 10,000 penalty units, which equates to a substantial penalty. Additionally, section 284-15 of the Act specifies that for corporations, the maximum penalty can be up to 50,000 penalty units. These penalties underscore the importance of adhering to the legislative requirements.