EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920404
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.
Linen House applied for a TCO in respect of certain novelty bedroom cushions on 16 June 2009.
Instrument
TCO No 0920404 was made on 04 September 2009. It declares that those certain novelty bedroom cushions 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. 0920404 is taken to have come into force on 16 June 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. 0920404, enacted in 2009, serves to provide tariff concessions on specific goods under the Customs Act 1901. This instrument addresses the need for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) for goods that are not substitutable and produced in Australia, thereby ensuring that importers benefit from reduced customs duty rates. The Customs Act 1901, enacted by the Australian Parliament, aims to streamline the process for applying for and granting tariff concessions, ensuring fairness and efficiency in the application of customs duties. The policy objective behind this instrument is to provide tariff relief to importers by reducing the customs duty on certain goods, thereby promoting trade and economic activity.
Scope and Application
The Customs Act 1901, specifically through its Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) which can apply lower rates of customs duty to certain goods. These orders are made by the Chief Executive Officer of Customs (CEO) when an application is submitted and deemed to meet the core criteria, notably when no substitutable goods are produced in Australia in the ordinary course of business. The scope of this Act applies to any person or entity seeking to import goods that qualify under the specified conditions for a tariff concession, with the geographic reach being national as it pertains to Australia's customs duties. The Act also stipulates that certain goods, as outlined in section 269SJ, cannot be subject to a TCO, and the CEO must ensure that the application does not pertain to these excluded items. The Act’s provisions can be extended or detailed further through subordinate instruments, allowing for flexibility in its application.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269B, 269E, 269F, 269P, and 269SJ of the Customs Act 1901 (the Act). Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application is not for goods specified in section 269SJ, the CEO must decide if it meets the core criteria as outlined in section 269C, which requires that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269B). If the application meets these criteria, the CEO must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This instrument, TCO No. 0920404, specifically applies to certain novelty bedroom cushions, reducing their duty from 7.5% to free.
The Act imposes several obligations on parties applying for a TCO. The applicant must ensure that their application is not for goods specified in section 269SJ of the Act, which excludes certain goods from tariff concession. Additionally, the applicant must provide sufficient evidence to demonstrate that no substitutable goods were produced in Australia on the day the application was lodged. The CEO, in turn, must review the application, determine if it meets the core criteria, and if so, issue a TCO. The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit their views on the application as soon as practicable after accepting it as valid (subsection 269K(1)).
The legislation does not explicitly outline specific offences or penalties for breaches related to the application or issuance of TCOs. However, the Act does provide a framework for the imposition of penalties for other customs-related breaches. For instance, section 260 of the Act allows for a penalty of up to $11,100 for individuals and up to $55,500 for bodies corporate for certain offences, such as making a false statement or representation. The maximum penalty for failing to comply with a requirement or prohibition under the Act can be up to $11,100 for individuals and $55,500 for bodies corporate, with additional penalties for repeated or serious breaches.
In summary, the Tariff Concession Instrument No. 0920404 outlines the process for applying for and issuing TCOs, ensuring that goods for which a TCO is granted benefit from reduced customs duty rates. It imposes obligations on applicants to ensure their applications meet the specified criteria and on the CEO to review and issue TCOs appropriately. While the specific legislation does not detail penalties for breaches related to TCOs, the broader Customs Act 1901 provides a framework for penalties related to customs non-compliance.