EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0928335
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.
Skymat Pty Ltd applied for a TCO in respect of certain disposable mats on 05 August 2009.
Instrument
TCO No 0928335 was made on 12 November 2009. It declares that those certain disposable mats 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. 0928335 is taken to have come into force on 05 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 was enacted to provide a comprehensive framework for the regulation of customs and excise duties, and to establish mechanisms for the assessment and collection of these duties. The Act was introduced to address the need for effective customs administration and revenue collection, ensuring that the Australian government could efficiently manage the flow of goods across its borders while also protecting domestic industries. Part XVA of the Act specifically provides for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, enabling the application of lower customs duty rates to certain goods. The objective is to encourage the import of goods that are not produced domestically, thus supporting the availability of diverse products in the market and potentially benefiting consumers. The Tariff Concession Instrument No. 0928335, made in 2009, is an example of how this mechanism is applied, granting tariff concessions on certain disposable mats by Skymat Pty Ltd, thereby reducing the duty rate from the general 5% to free. This measure aligns with the policy objective of facilitating access to goods that are not domestically produced.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders are designed to apply a lower rate of customs duty to specified goods, provided the application meets the core criteria outlined in the Act. The process involves an application by a person or entity, followed by an assessment by the CEO to determine if the application meets the conditions stipulated in sections 269C, 269D, and 269E. Notably, the Act excludes certain goods from eligibility under section 269SJ, which details goods that cannot be subject to a TCO. This particular legislation affects the importation of specific disposable mats for which Skymat Pty Ltd applied, and it was found that no substitutable goods were produced in Australia, thereby satisfying the criteria for a tariff concession. The application process also mandates public consultation, although no submissions were received in this instance. The TCO itself came into force on the date the application was lodged and does not affect existing rights or impose new liabilities, while providing potential duty refunds to importers for imports made since the effective date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders, as outlined in section 269F, apply lower rates of customs duty to goods that are subject to a TCO. An application for a TCO can be made by any person, provided the goods are not those listed in section 269SJ, which cannot be subject to a TCO. The CEO's decision to approve or reject an application hinges on whether it meets the core criteria, as stipulated in section 269C, which requires that no substitutable goods were produced in Australia at the time the application was lodged. Definitions for key terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269G respectively.
The obligations imposed by the Customs Act on parties or entities it governs include the requirement for the CEO to make a written TCO if the application meets the core criteria, as set out in section 269P(3). Furthermore, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any person to lodge submissions against the TCO if they believe it should not be made. In the case of TCO No. 0928335, the CEO did not receive any submissions. The TCO itself does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person, as stated in subsection 269S(1) and the explanatory statement.
Should there be a breach of any provision within the Customs Act, various offences, penalties, or consequences may apply. However, the explanatory statement provided does not specify any particular offences, penalties, or consequences related to TCOs. The general implication of non-compliance with the Act can result in both civil and criminal penalties, depending on the severity and nature of the breach. For specific offences and their corresponding maximum penalties, reference would need to be made to the broader provisions of the Customs Act and any relevant regulations.