EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0924095
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 boot cleaners on 08 July 2009.
Instrument
TCO No 0924095 was made on 25 September 2009. It declares that those certain boot cleaners 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. 0924095 is taken to have come into force on 08 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 Commonwealth Parliament, provides the framework for the administration of customs and excise duties in Australia. One aspect of this Act is the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme allows for a lower rate of customs duty to apply to specified goods, provided certain criteria are met. The problem or gap this scheme addresses is the potential for certain goods, particularly those that are not produced domestically, to benefit from tariff concessions, thereby enhancing economic efficiency and competitiveness for businesses. The policy objective, as outlined in the explanatory statement, is to ensure that the application of tariff concessions is fair and benefits those who import goods that are not produced in Australia, thus avoiding unnecessary burdens on domestic production.
Scope and Application
The Tariff Concession Instrument No. 0924095 under the Customs Act 1901 applies specifically to certain boot cleaners as per the application submitted by Ed Oates Pty Ltd. The Act pertains to the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, aimed at granting lower rates of customs duty on specified goods. The application for a TCO is subject to the core criteria outlined in section 269C of the Act, which requires that no substitutable goods are produced in Australia at the time of the application. Once the CEO determines that an application meets these criteria, they must issue a written order, which in this case resulted in Instrument TCO No. 0924095, declaring that the specified boot cleaners are to be subject to a free rate of duty instead of the general rate of 5%. This legislation applies across the Commonwealth of Australia, impacting entities involved in the importation of these goods. The application process includes a public notice period in the Gazette for any interested parties to submit objections, although in this instance, no submissions were received. The TCO itself does not retroactively disadvantage or impose liabilities on any person, but it does provide potential benefits to importers who can apply for duty refunds on imports since the effective date of the concession.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0924095 under the Customs Act 1901 (section 269F) and Customs Tariff Act 1995 (Schedule 4, item 50) outline the process for applying for a Tariff Concession Order (TCO). An applicant, such as Ed Oates Pty Ltd in this case, can apply to the Chief Executive Officer (CEO) of Customs for a TCO to reduce the customs duty on certain goods. If the CEO is satisfied that the application meets the core criteria (section 269C), they must issue a written order (TCO) specifying that the goods are subject to a lower rate of duty as per the prescribed item in the Customs Tariff Act 1995. In this case, the TCO declares that the boot cleaners are subject to a free rate of duty instead of the general rate of 5%.
The Act imposes specific obligations on both the CEO and the applicants for a TCO. The CEO must ensure that the application does not pertain to goods specified in section 269SJ, which lists goods that cannot be subject to a TCO. The CEO must also verify that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged (section 269C). This includes understanding the definitions of "goods produced in Australia" (section 269D), "ordinary course of business" (section 269E), and "substitutable goods" (section 269F). Upon meeting these criteria, the CEO is mandated to issue a TCO.
Furthermore, the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting submissions from any interested parties who may oppose the concession (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice. The TCO is deemed to have come into effect on the day the application was lodged (subsection 269S(1)), which in this case was 08 July 2009. Importantly, the TCO does not affect any pre-existing rights or impose liabilities on any person other than the Commonwealth.
Should any party fail to comply with the provisions of the Customs Act 1901 or the Customs Tariff Act 1995, they may face legal consequences. Breaches of the Act can result in penalties, both civil and criminal, depending on the severity and intent behind the violation. The specific penalties for breaches are not detailed in the Explanatory Statement but can include fines or imprisonment as prescribed under the relevant sections of the Act. It is essential for all parties involved to adhere to the statutory requirements to avoid these consequences.