EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0927982
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 inflatable watersport equipment on 03 August 2009.
Instrument
TCO No 0927982 was made on 23 October 2009. It declares that those certain inflatable watersport equipment 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. 0927982 is taken to have come into force on 03 August 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, introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). The Act aims to provide tariff concessions for certain goods by lowering the rate of customs duty, provided no substitutable goods are produced in Australia. Specifically, the explanatory statement for Tariff Concession Instrument No. 0927982 outlines the process for BCF Australia’s application for a TCO concerning inflatable watersport equipment. The CEO found that no substitutable goods were produced in Australia, satisfying the core criteria. Consequently, the instrument declares that these goods are subject to a 0% duty rate, down from the general rate of 5%. The instrument’s objective is to ensure that importers can benefit from the tariff reduction, potentially applying for duty refunds on imports made since the TCO came into effect on 03 August 2009.
Scope and Application
The Tariff Concession Instrument No. 0927982 applies to specific inflatable watersport equipment as determined by the application made to the Chief Executive Officer of Customs (CEO) under Part XVA of the Customs Act 1901. The Act allows for a TCO to be issued if the CEO is satisfied that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, and the application does not pertain to goods that are excluded under section 269SJ of the Act. The application was made by BCF Australia on 03 August 2009, and following a determination by the CEO that the application met the core criteria, TCO No. 0927982 was issued on 23 October 2009. This instrument applies to the goods specified in the application, granting them a concession on the general rate of duty, which is 5%, by making the duty free. The instrument does not impose any liabilities on any person, and any rights of importers will be beneficially affected, with the ability to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework through which the Chief Executive Officer of Customs (the CEO) may issue Tariff Concession Orders (TCOs) (section 269F). Section 269C stipulates that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. The definition of "substitutable goods" as provided in section 269D, along with "goods produced in Australia" and "ordinary course of business" as defined in sections 269E and 269F respectively, is essential to determining whether a TCO application is valid. If the CEO is satisfied that the application meets these core criteria, they must issue a written order, a TCO, specifying the applicable prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)).
Entities or individuals applying for a TCO must ensure that their application is valid under the Act. They need to demonstrate that the goods in question do not have substitutable equivalents produced in Australia. This involves providing sufficient evidence to the CEO, who will assess the application against the criteria outlined in the Act. Once the CEO is satisfied with the application, they are required to issue the TCO, which will specify the new tariff rate applicable to the goods (section 269P(3)). In the case of BCF Australia, the CEO issued TCO No 0927982 on 23 October 2009, which declared that certain inflatable watersport equipment would be subject to a free rate of duty under item 50 of Schedule 4 to the Tariff (Instrument).
The Act imposes specific obligations on the CEO when handling TCO applications. 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 (subsection 269K(1)). In the case of TCO No 0927982, the CEO did not receive any submissions in response to this invitation. The TCO is effective from the date the application was lodged (subsection 269S(1)), which for TCO No 0927982 was 03 August 2009. It is important to note that the TCO does not affect the rights of any person as at the date of registration, nor does it impose any liabilities on any person other than the Commonwealth (subsection 269S(1)).
Failure to comply with the provisions of the Act may result in various consequences. While the Act does not explicitly detail specific offences or penalties for breaches related to TCOs, general provisions under the Customs Act 1901 may apply. These could include fines or imprisonment for offences such as providing false information in an application or evading customs duty. The specific penalties would depend on the nature and severity of the breach, with maximum penalties varying according to the offence committed. It is crucial for applicants and other stakeholders to adhere to the requirements set out in the Act to avoid any potential legal repercussions.