EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0926151
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.
Bcf Australia applied for a TCO in respect of certain fishing tackle bags on 22 July 2009.
Instrument
TCO No 0926151 was made on 02 October 2009. It declares that those certain fishing tackle bags 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. 0926151 is taken to have come into force on 22 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, as amended, includes provisions under Part XVA to facilitate the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. Enacted by the Australian Parliament, the Act addresses the need to provide tariff concessions for certain goods, ensuring that Australian industries can compete more effectively in the global market by reducing customs duties on specific items. This legislative framework enables the CEO to grant tariff concessions to importers of goods that are not produced domestically, thereby promoting fair trade practices and supporting economic growth. In this context, Bcf Australia's application for a TCO in respect of certain fishing tackle bags exemplifies how the Act is applied to provide tariff relief, enhancing the competitiveness of Australian businesses in international trade.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to entities or individuals seeking tariff concessions on imported goods, provided the goods are not specified in section 269SJ of the Act and meet the core criteria outlined in section 269C. This means that the application must relate to goods for which no substitutable goods are produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. The geographic reach of the Act is national, as it applies across Australia and is subject to the customs regulations of the Commonwealth. However, the Act does not apply to goods specified in section 269SJ, which are excluded from tariff concessions. The application of the Act may be extended or restricted through subordinate instruments, although such mechanisms are not detailed in the provided text. The Tariff Concession Instrument No. 0926151, made on 22 July 2009, serves as a specific example, providing a tariff concession on certain fishing tackle bags, reducing the duty from 5% to free, contingent on the CEO’s satisfaction that no substitutable goods were produced in Australia.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0926151 (TCO No. 0926151) under the Customs Act 1901 (section 269F) are concerned with the application process for a Tariff Concession Order (TCO) and the criteria for its approval. Specifically, section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO. The CEO is required to assess the application against the core criteria outlined in sections 269C and 269P(3). If the CEO determines that the application meets the core criteria, which means that no substitutable goods were produced in Australia on the date of the application (section 269C), they must issue a TCO (section 269P(3)). In this instance, the CEO was satisfied that the application for certain fishing tackle bags met these criteria, resulting in the issuance of TCO No. 0926151.
The obligations and requirements imposed by the Customs Act 1901 on the parties involved include the necessity for applicants to ensure that their applications for a TCO meet the statutory criteria. The CEO of Customs must rigorously assess each application against these criteria and issue a TCO if satisfied, while also ensuring that the application does not relate to goods that are specified as ineligible under section 269SJ of the Act. Furthermore, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge submissions opposing the TCO if they believe it should not be made (subsection 269K(1)). In the case of TCO No. 0926151, no submissions were received, facilitating the swift issuance of the TCO.
The Act includes provisions for penalties and consequences for breaches related to the making and enforcement of TCOs. Although specific offences and penalties are not detailed in the explanatory statement, the general legal framework under which the Customs Act operates includes provisions for both civil and criminal penalties for non-compliance with customs regulations. These penalties can include fines and imprisonment, depending on the severity of the breach. The specific penalties for breaches related to TCOs would typically be aligned with the general enforcement provisions of the Customs Act, ensuring that any misuse or improper application of TCOs is adequately deterred and punished.