EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927491
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.
Techsupplies Australia applied for a TCO in respect of certain shopping bags on 21 July 2009.
Instrument
TCO No 0927491 was made on 09 October 2009. It declares that those certain shopping 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. 0927491 is taken to have come into force on 21 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, establishes the framework for the administration of customs and excise duties in Australia. One notable component of this Act is Part XVA, which allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This scheme aims to address the issue of providing tariff concessions on specific goods, thereby encouraging trade and economic growth. The primary policy objective underpinning the creation of TCOs is to ensure that certain goods, which are not produced domestically in the ordinary course of business, can benefit from reduced customs duty rates. This mechanism helps support industries by making imported goods more competitively priced. In the context of Tariff Concession Instrument No. 0927491, the CEO granted a concession on certain shopping bags, reducing the duty rate from 5% to free, effective from 21 July 2009, the date the application was lodged. This decision was made following a thorough assessment that confirmed no substitutable goods were produced in Australia, thus meeting the core criteria set out in the Act.
Scope and Application
The Customs Act 1901, through its Part XVA, outlines the procedure for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), aimed at applying lower rates of customs duty on certain goods. This legislative framework applies to any person who can demonstrate that the goods for which they are seeking a concession are not substitutable by goods produced in Australia and are not among those specifically excluded by section 269SJ of the Act. The concessions granted by the TCOs are applicable nationally across Australia, as the Customs Act operates under the Commonwealth jurisdiction. Importantly, these concessions do not affect the rights of any person, other than the Commonwealth, in respect of actions taken prior to the TCO's effective date. The TCOs themselves do not impose any liabilities on any person, although they do confer benefits on importers who may apply for duty refunds on goods imported from the date the TCO is deemed to have come into force. The application and scope of this legislation can be further refined through subordinate instruments, allowing for adjustments to the specifics of how TCOs are administered and enforced.
Key Provisions
The primary operative sections of this legislation concern Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901 (section 269F). An application can be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act. If the CEO is satisfied that the application is valid and meets the core criteria set out in sections 269C and 269P, they must make a written order (section 269P(3)). This order declares that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, effectively applying a lower rate of customs duty or making it duty-free.
The Act imposes several obligations on the parties involved. When a TCO application is deemed valid, the CEO must publish a notice in the Gazette, inviting submissions from interested parties (subsection 269K(1)). Although Techsupplies Australia applied for a TCO on 21 July 2009, no submissions were received in response to the published notice. Additionally, the CEO is required to ensure that the application meets the core criteria, which includes confirming that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The CEO must also decide whether to make a TCO if the application satisfies these criteria.
Breach of the obligations set out in the Customs Act 1901 can lead to various consequences. While specific offences and penalties are not detailed in the provided explanatory statement, the Act generally includes provisions for penalties in cases of non-compliance. For example, section 274 of the Customs Act 1901 outlines penalties for fraudulent importation, which may include fines and imprisonment. The Tariff Concession Instrument No. 0927491 does not impose any new liabilities on individuals or entities, but it does clarify the rights of importers, allowing them to apply for refunds of duty on goods imported since the TCO came into force (paragraph 126(1)(r) of the Regulations).