EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918143
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.
ED Oates Pty Ltd applied for a TCO in respect of certain mop refills on 28 May 2009.
Instrument
TCO No 0918143 was made on 21 August 2009. It declares that those certain mop refills 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 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. 0918143 is taken to have come into force on 28 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 was enacted to facilitate and regulate the administration of customs and excise duties, among other things. The Act, enacted by the Commonwealth Parliament, includes provisions for the creation of Tariff Concession Orders (TCOs) which can reduce the customs duty on specified goods. The problem or gap that this Act was introduced to address is the need to provide relief on customs duties for certain goods where no substitutable goods are produced in Australia, thereby encouraging trade and economic efficiency. TCO No. 0918143, made on 21 August 2009, is an example of such an order, reducing the duty on certain mop refills from 5% to free. This particular order was made after the CEO was satisfied that no substitutable goods were produced in Australia, and it came into force on 28 May 2009, the date the application was lodged. The policy objective underlying the creation of such TCOs is to support Australian businesses by reducing the cost of imported goods where no local alternatives exist.
Scope and Application
The Tariff Concession Instrument No. 0918143 under the Customs Act 1901 applies to specific goods, namely certain mop refills, as identified in the application by ED Oates Pty Ltd. The Act facilitates the process whereby a Tariff Concession Order (TCO) can be made by the Chief Executive Officer of Customs (CEO), which effectively reduces the customs duty on specified goods to zero, provided certain criteria are met. These criteria include the absence of substitutable goods produced in Australia, as outlined in section 269C of the Act. The geographic reach of this legislation is national, as it pertains to the Commonwealth of Australia. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which lists those goods ineligible for TCOs. The application of this Act is extended through subordinate instruments, specifically the Customs Tariff Act 1995, which sets out the prescribed tariff items applicable to goods subject to a TCO. The implementation of this TCO benefits importers by potentially allowing them to apply for refunds of duties paid on the specified goods imported since the effective date of the TCO.
Key Provisions
The main provisions of the Tariff Concession Instrument No. 0918143, as explained in the explanatory statement, are rooted in sections 269C, 269F, 269K, 269P, and 269S of the Customs Act 1901. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application is not in relation to goods specified in section 269SJ, the CEO must determine whether the application meets the core criteria set out in section 269C. If these criteria are satisfied, the CEO must make a written TCO as per section 269P(3). The application process also requires the CEO to publish a notice in the Gazette, inviting submissions on the proposed TCO, as per section 269K(1).
The obligations imposed by the Act on the parties involved are primarily administrative and procedural. The CEO of Customs must thoroughly assess each TCO application to ensure it complies with the criteria outlined in section 269C. This involves verifying that no substitutable goods are produced in Australia at the time of the application. Additionally, the CEO must publish a notice in the Gazette and invite submissions from interested parties, ensuring a transparent process before making a decision on the application. Once a TCO is made, it is taken to have come into force on the day the application was lodged, as per section 269S(1).
In terms of consequences for non-compliance or breach of the Act's provisions, the explanatory statement does not explicitly outline criminal or civil penalties. However, it is implied that any failure by the CEO to follow the prescribed processes or to accurately assess applications could lead to legal challenges or administrative penalties. For importers, the rights to apply for a refund of duty under Regulation 126(1)(r) are explicitly mentioned, which suggests that failure to adhere to the terms of the TCO could result in the denial of these benefits.
The explanatory statement does not detail specific maximum penalties for breaches, but it is clear that the legislative framework is designed to ensure that the process for granting TCOs is fair and transparent. The rights of importers are protected, and any adverse impact on these rights or liabilities on persons other than the Commonwealth is explicitly precluded by the provisions of the Act. The main focus seems to be on procedural accuracy and the benefits to importers rather than punitive measures for breaches.