EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917971
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 0917971 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. 0917971 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. 0917971 was enacted in 2010 as part of the Customs Act 1901, designed to address the need for a streamlined process in applying for tariff concessions on certain goods. The legislation allows for the Chief Executive Officer of Customs to grant concessions, thereby reducing customs duty rates on specified goods, provided no substitutable goods are produced in Australia. This was implemented to facilitate trade and support Australian businesses by lowering the cost of imported goods, thereby promoting economic efficiency. The instrument was enacted by the relevant federal authority under the authority granted by the Customs Act 1901 and aims to ensure that tariff concessions are applied fairly and effectively to support trade objectives without imposing undue burdens on businesses or the Commonwealth.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) that provide for a lower rate of customs duty on certain goods. The Act applies to any person or entity wishing to import goods that are eligible for a tariff concession. The process for applying for a TCO involves submitting an application to the CEO, who must determine if the application meets the core criteria, particularly if no substitutable goods are produced in Australia. If the application is deemed valid, the CEO issues a written order declaring the goods eligible for a concession, which in this case resulted in the tariff on specific cushion covers being set at free instead of the general rate of 7.5%. The geographic scope of this legislation is national, affecting all importers across Australia. The Act does not disadvantage any person or entity by imposing liabilities for actions taken prior to the issuance of the TCO, and it provides a mechanism for importers to apply for a refund of duty on goods imported since the effective date of the TCO. The Act may be further refined or expanded through subordinate instruments, but the primary legislation clearly outlines the process and criteria for tariff concessions.
Key Provisions
The main operative sections of this legislation, particularly sections 269C, 269B, 269E, and 269F of the Customs Act 1901, provide the framework for the creation and application of Tariff Concession Orders (TCOs). Section 269C stipulates that an application for a TCO will meet the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Section 269B defines key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act. If the CEO is satisfied that the application meets the core criteria, section 269P(3) mandates that the CEO must issue a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations and requirements imposed by this Act primarily focus on the CEO of Customs, who must rigorously assess TCO applications against the core criteria. If the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business, they must proceed to issue a TCO as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting submissions from any person who believes there are reasons why the TCO should not be made. This ensures transparency and provides an opportunity for interested parties to voice their concerns.
The Act also outlines potential consequences for non-compliance. While the explanatory statement does not specify any criminal offences, it highlights that the rights of a person (other than the Commonwealth) as at the date of registration will not be adversely affected by the TCO. This means that the TCO does not impose any liabilities on any person in respect of anything done or omitted to be done before the date of registration. Additionally, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force under paragraph 126(1)(r) of the Regulations. The explanatory statement does not mention any civil or criminal penalties for breach of the Act, suggesting that the focus is more on administrative compliance and ensuring the smooth application of tariff concessions.