EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0930371
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.
Chemcorp Pty Ltd applied for a TCO in respect of certain sleeping masks on 19 August 2009.
Instrument
TCO No 0930371 was made on 06 November 2009. It declares that those certain sleeping masks 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 7.5%. 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. 0930371 is taken to have come into force on 19 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 Tariff Concession Instrument No. 0930371, enacted under the Customs Act 1901, aims to address the need for tariff concessions on specific imported goods, thereby promoting fair trade practices and economic efficiency. This legislation was introduced to allow the Chief Executive Officer of Customs to apply lower rates of customs duty on goods that are the subject of a Tariff Concession Order (TCO), provided that no substitutable goods are produced in Australia in the ordinary course of business. The policy objective of this instrument is to ensure that Australian consumers and businesses can access essential goods at reduced rates, facilitating economic growth and competition. The Tariff Concession Instrument No. 0930371, which came into effect on 19 August 2009, was created following an application by Chemcorp Pty Ltd for a TCO on certain sleeping masks, resulting in a duty rate of free for these goods, down from the general rate of 7.5%. The instrument ensures that no existing rights or liabilities are adversely affected, and it provides a mechanism for importers to apply for duty refunds.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides the framework for Tariff Concession Orders (TCOs) that the Chief Executive Officer of Customs (CEO) may issue. These orders apply to goods for which an application is made and approved by the CEO, ensuring that no substitutable goods are produced in Australia in the ordinary course of business. The application process involves an assessment of core criteria, and if satisfied, the CEO must issue a written order specifying the reduced duty rate applicable to the goods in question. For instance, TCO No. 0930371 applies to certain sleeping masks, reducing their duty rate to free from the general rate of 7.5%. This legislation applies nationally across Australia, affecting importers by potentially allowing them to claim refunds on duties paid before the TCO's effective date. The TCO does not disadvantage or impose liabilities on non-Commonwealth entities prior to its registration date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0930371, under the Customs Act 1901, pertain to the establishment of a Tariff Concession Order (TCO) (s 269F). This instrument was created to provide a lower rate of customs duty on certain sleeping masks as specified in the order. According to section 269C, a TCO application is considered to meet the core criteria if no substitutable goods are produced in Australia on the day the application was lodged. If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must make a written order declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 7.5% (s 269P(3)).
The Act imposes specific obligations on the CEO and applicants. The CEO must decide whether an application for a TCO meets the core criteria and, if satisfied, make a written order (s 269P(3)). The CEO is also required to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person who believes the TCO should not be made to submit their reasons (s 269K(1)). Chemcorp Pty Ltd, the applicant in this case, must ensure their application meets the core criteria, specifically that no substitutable goods are produced in Australia on the application date.
Failure to comply with the provisions of the Customs Act 1901 or the terms of the TCO may result in civil or criminal consequences. For instance, non-compliance with the duty obligations or misrepresenting facts in an application could lead to penalties. The maximum penalties for such breaches are not explicitly stated in the explanatory statement but are typically governed by the broader customs and excise laws, which can include fines and imprisonment for serious offences. Additionally, any party adversely affected by the TCO might have grounds for legal challenge, depending on the specifics of the case and the applicable legal frameworks.