EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930206
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.
Independence Studios applied for a TCO in respect of certain communication wire storage cord wrap on 18 August 2009.
Instrument
TCO No 0930206 was made on 06 November 2009. It declares that those certain communication wire storage cord wrap 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. 0930206 is taken to have come into force on 18 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 establish a comprehensive regulatory framework governing customs and excise duties in Australia. One of the critical mechanisms under this Act is the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA. This instrument was introduced to address the need for targeted tariff relief for specific goods, thereby fostering trade and economic efficiency by reducing customs duty rates. The policy objective behind this provision is to ensure that Australian industries and businesses can access foreign goods more affordably, potentially lowering costs and enhancing competitiveness. The Parliament of Australia established this framework to allow for dynamic tariff adjustments in response to specific economic conditions or industry needs, ensuring that the Australian market remains responsive to global economic trends.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These TCOs apply to specific goods that attract a reduced rate of customs duty when no substitutable goods are produced in Australia in the ordinary course of business. The Act applies to individuals and entities that seek to import goods that could potentially benefit from tariff concessions, provided these goods do not fall under the exclusions specified in section 269SJ. The geographic reach of this legislation is national, impacting all importers across Australia. The TCOs extend the application of the Act by providing for specific tariff reductions on particular goods, subject to the core criteria outlined in sections 269C, 269B, and 269D. Exemptions or thresholds are determined on a case-by-case basis during the application process. The explanatory statement clarifies that any application for a TCO must be made in accordance with the stipulated provisions, and any decision by the CEO to grant a TCO is subject to public notice and potential submissions from interested parties, although no submissions were received in this instance.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0930206 under the Customs Act 1901 (the Act) involve the establishment and operation of Tariff Concession Orders (TCOs) (sections 269C, 269F, 269P, and 269S). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO regarding specified goods. If the CEO is satisfied that the application is valid and meets the core criteria set out in section 269C, they must make a written order (section 269P). The core criteria include that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). This process aims to provide a lower rate of customs duty for goods that are the subject of a TCO.
The obligations imposed by the Act on the parties include ensuring that the application for a TCO is valid and meets the specified core criteria. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties, as per subsection 269K(1) of the Act, although in this instance, no submissions were received. The CEO is required to make a written order if satisfied that the application meets the core criteria. Additionally, the CEO must ensure that the rights of existing parties, other than the Commonwealth, are not adversely affected by the TCO, as per the provisions in subsection 269S(1).
In terms of offences, penalties, or consequences, the Act does not explicitly state any criminal or civil penalties for failure to comply with the provisions of a TCO. However, the failure to comply with the requirements of the Act or the TCO itself could potentially lead to disputes or legal actions. For instance, if a person believes their rights are being adversely affected by the TCO, they could seek judicial review or other legal remedies. Moreover, any misapplication or misrepresentation in the application process could be subject to penalties under other relevant laws, such as those governing fraud or misrepresentation in administrative processes.