EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0925639
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.
Import Ants Pty Ltd applied for a TCO in respect of certain exercise books on 20 July 2009.
Instrument
TCO No 0925639 was made on 18 December 2009. It declares that those certain exercise books 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. 0925639 is taken to have come into force on 20 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 Australian Parliament, established a framework for the administration of customs and excise duties. One significant feature of this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA. This scheme aims to provide relief on customs duties for certain goods that meet specific criteria, including the absence of substitutable goods produced in Australia. The policy objective is to facilitate the importation of goods that are not domestically produced, thereby supporting trade and economic activities. Tariff Concession Instrument No. 0925639, issued in 2009, is an example of such an order, granting a duty-free status to certain exercise books, which otherwise attract a 5% duty rate. The instrument was introduced to address the specific need of Import Ants Pty Ltd to reduce the duty on these goods, enhancing their competitiveness in the market.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs. This legislation applies to individuals or entities that seek tariff concessions for goods imported into Australia, provided these goods are not specified in section 269SJ of the Act. The scope of the Act encompasses a wide range of goods that may be subject to a TCO if they are not substitutable by goods produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, as it applies across Australia, governed by the Commonwealth. The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the tariff items applicable to goods under a TCO. Exclusions from this Act include goods listed in section 269SJ, which cannot be subject to a TCO, and the Act does not disadvantage any person or impose liabilities on individuals for actions taken before the TCO registration date.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0925639 (section 269F, 269C, 269B, 269D, 269E, 269P(3), 269K(1) and 269S(1)) outline the process and criteria for the application and approval of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). An applicant, such as Import Ants Pty Ltd, may apply for a TCO for certain goods, like exercise books, if the CEO is satisfied that the application meets the core criteria. This includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO determines that the application meets these criteria, they must issue a written order declaring the goods to which the TCO applies, effectively reducing the customs duty rate.
The Act imposes several obligations on parties involved in the TCO process. The CEO must assess the validity of TCO applications, ensuring they meet the specified criteria. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. Additionally, the applicant must provide all necessary information and documentation to support their application. Once a TCO is made, it comes into effect on the date the application was lodged, as stipulated in subsection 269S(1) of the Act. The rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO.
In terms of enforcement and consequences, the Act does not specify particular offences or penalties for breaches related to TCOs. However, the CEO's decision-making process and the publication of notices in the Gazette ensure that the application process is transparent and allows for public scrutiny. Failure to comply with the requirements for a TCO application or providing misleading information could potentially lead to the rejection of the application or other administrative consequences. It is crucial for applicants to ensure their applications are accurate and meet the criteria to avoid such outcomes.