EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0936711
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.
The Reject Shop Limited applied for a TCO in respect of certain scourers on 29 September 2009.
Instrument
TCO No 0936711 was made on 04 December 2009. It declares that those certain scourers 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. 0936711 is taken to have come into force on 29 September 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 Australian Parliament, establishes a framework for the imposition of customs duties on imported goods. This Act includes provisions for Tariff Concession Orders (TCOs), which are designed to reduce customs duties on certain goods under specific conditions. The introduction of Part XVA of the Act aimed to address gaps in the customs duty regime by allowing the Chief Executive Officer of Customs to grant concessions where no substitutable goods are produced in Australia. This mechanism facilitates tariff reductions for imported goods that meet the core criteria, ultimately benefiting importers by lowering their duty liabilities. Tariff Concession Instrument No. 0936711, made under this Act, exemplifies the process by which the CEO can declare certain imported goods eligible for reduced duty rates, as demonstrated in the case of The Reject Shop Limited's application for a TCO concerning specific scourers.
Scope and Application
The Tariff Concession Instrument No. 0936711 applies to the Customs Act 1901, specifically under Part XVA which deals with Tariff Concession Orders (TCOs). The Act applies to individuals and entities, including businesses, that seek to import goods and apply for tariff concessions on those goods. The instrument focuses on the process by which the Chief Executive Officer of Customs (CEO) assesses and grants tariff concessions to ensure that no substitutable goods are being produced in Australia. This applies to the goods specified in the application and the conditions set out under sections 269C, 269D, and 269E of the Act. The scope of the instrument extends nationally, with its application governed by federal laws. There are specific exclusions, such as goods listed in section 269SJ of the Act, which are ineligible for TCOs. The instrument can be further detailed or modified through subordinate instruments, ensuring flexibility in the application of tariff concessions. The commencement date of the TCO is the day the application is lodged, ensuring that the rights of importers are protected and that no disadvantages or liabilities are imposed retroactively on any parties.
Key Provisions
The main operative sections of the Customs Act 1901, as evidenced by Tariff Concession Instrument No. 0936711, are sections 269C, 269B, 269D, 269E, 269F, 269P(3), 269K(1), and 269S. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). Section 269C establishes the core criteria for the CEO to determine if the application meets the requirements, which include the absence of substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269B and 269D. If the CEO is satisfied that the application meets these criteria, section 269P(3) mandates that a TCO be issued. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, while section 269S dictates that the TCO comes into force on the date the application was lodged.
The Act imposes several obligations on the parties it governs. The CEO is required to assess TCO applications to determine if they meet the core criteria outlined in section 269C. This involves verifying that no substitutable goods are produced in Australia in the ordinary course of business, as per the definitions in sections 269B and 269D. Once the CEO is satisfied that an application meets the criteria, section 269P(3) mandates the issuance of a TCO. Additionally, section 269K(1) obligates the CEO to publish a notice in the Gazette, providing an opportunity for interested parties to submit any objections to the TCO. The CEO must consider these submissions before making a final decision on the TCO.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. Although the explanatory statement does not specify criminal or civil penalties for breaches, it is reasonable to infer that non-compliance with the statutory requirements could result in administrative penalties or legal action. For instance, if the CEO fails to properly assess an application or does not publish a notice as required by section 269K(1), this could potentially lead to legal challenges or administrative penalties. Furthermore, any misrepresentation in an application, if discovered, could also result in sanctions against the applicant.
Tariff Concession Instrument No. 0936711, concerning certain scourers, exemplifies how the Act operates in practice. The Reject Shop Limited applied for a TCO, and the CEO issued Instrument No. 0936711 on 4 December 2009, declaring that the specified scourers would be subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995. The CEO's decision was based on the absence of substitutable goods produced in Australia. This decision has beneficial implications for importers, who can now apply for a refund of duty on goods imported since the TCO came into force on 29 September 2009, as per paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration, except to the benefit of importers.