EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0920580
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.
Select O Pedic Bedding applied for a TCO in respect of certain polyurethane sheets on 07 July 2009.
Instrument
TCO No 0920580 was made on 18 September 2009. It declares that those certain polyurethane sheets 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. 0920580 is taken to have come into force on 07 July 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 Parliament of Australia, establishes a framework for the administration of customs and excise duties, including the mechanism for issuing Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). This Act addresses the gap by providing a pathway for tariff concessions on specific goods, ensuring that businesses can apply for reduced customs duties on goods that are not produced domestically and for which there are no suitable substitutes. The objective, as stated in the explanatory statement, is to facilitate trade and economic efficiency by allowing duty-free importation of certain goods under specified conditions. The CEO's role is pivotal in assessing applications against the criteria laid out in the Act, ensuring that the concessions are granted fairly and in line with the policy objectives of promoting competition and consumer access to a broader range of products.
Scope and Application
The Tariff Concession Instrument No. 0920580, under the Customs Act 1901, applies to goods specified in the Instrument, particularly certain polyurethane sheets, where a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs. This Act facilitates the application of lower rates of customs duty to eligible goods, provided that no substitutable goods are produced in Australia in the ordinary course of business on the date of the application. The geographic reach of the Act is national, as it applies to goods imported into Australia. The Instrument is effective from the date of the application, which in this case is 7 July 2009, and it does not retroactively affect the rights or impose liabilities on any person, except to the extent that it allows for the refund of duty on eligible goods imported since the effective date. The Instrument ensures that the application of the concession does not disadvantage any person other than the Commonwealth and imposes no new liabilities on any party.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0920580 under the Customs Act 1901 (section 269C) involve the making of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO) for certain polyurethane sheets. The TCO declares that these sheets are subject to a free rate of duty instead of the general rate of 5%, as determined under item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument was made on 18 September 2009, following an application by Select O Pedic Bedding on 7 July 2009, and came into effect on the date of the application under section 269S(1) of the Act. This TCO is designed to provide relief from customs duty where no substitutable goods are produced in Australia, as stipulated in section 269C of the Customs Act 1901.
The Act imposes specific obligations and requirements on the parties involved in the process of applying for a TCO. The applicant must ensure that their application complies with the core criteria set out in section 269C, specifically that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The CEO is required to verify these criteria and, if satisfied, must make a written TCO as per section 269P(3). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per section 269K(1). In this case, no submissions were received.
The Act also outlines consequences for non-compliance with its provisions. While the explanatory statement does not explicitly detail offences, penalties, or civil/criminal consequences, it is reasonable to infer that failure to adhere to the conditions for TCOs or misuse of the concession could lead to legal repercussions. The general framework of the Customs Act 1901 may provide for penalties in cases of non-compliance, although the specific penalties are not detailed in this particular instrument. The TCO itself does not impose any liabilities on any person, as clarified under section 269S(1), but it does provide a benefit to importers by potentially allowing them to apply for a refund of duty on goods imported since the TCO came into force.