EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0937254
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.
Musicway Corporation Ltd applied for a TCO in respect of certain camera bags and cases on 02 October 2009.
Instrument
TCO No 0937254 was made on 18 December 2009. It declares that those certain camera bags and cases 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. 0937254 is taken to have come into force on 02 October 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. 0937254, enacted under the Customs Act 1901, addresses the issue of providing tariff concessions for specific goods, ensuring they benefit from a lower rate of customs duty. This instrument was introduced to facilitate trade by reducing the financial burden on importers of certain goods, thus encouraging the importation and consumption of these goods within Australia. The policy objective is to support the import of goods that are not produced domestically or are produced in limited quantities, thereby enhancing consumer choice and potentially lowering prices. The instrument was created through the authority vested in the Chief Executive Officer of Customs, who evaluates applications for tariff concessions and determines their eligibility based on specific criteria outlined in the Act. The instrument came into force on the date the application was lodged, ensuring that the rights of importers are protected and that no liabilities are imposed on individuals prior to the concession's implementation.
Scope and Application
The Tariff Concession Instrument No. 0937254, made under section 269F of the Customs Act 1901, applies to the goods specified in the instrument, namely certain camera bags and cases, and is targeted at businesses and importers involved in the importation of these items. The geographic reach of the Act is national, as it operates within the framework of the Commonwealth’s customs legislation. The Act applies to any person or entity seeking tariff concessions for goods imported into Australia. Notably, the application of this legislation is restricted by section 269SJ, which excludes certain goods from eligibility for a Tariff Concession Order (TCO). The CEO must ensure that the application meets the core criteria, specifically that no substitutable goods are produced in Australia, as outlined in sections 269C and 269D of the Act. The instrument itself extends the application of the Act by specifying the conditions under which the lower rate of customs duty applies, effectively reducing the duty on the mentioned camera bags and cases from 5% to free. The instrument also mandates consultation and publication processes as per section 269K, ensuring transparency and public input before the issuance of the TCO.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) are sections 269C, 269F, 269K, 269P, and 269S, which together facilitate the creation of Tariff Concession Orders (TCOs). Specifically, section 269F allows an individual to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the application is not in relation to goods specified in section 269SJ, which sets out goods that cannot be subject to a TCO, the CEO must determine whether the application meets the core criteria as outlined in section 269C. If the CEO is satisfied that the application meets these criteria, a written order declaring the goods eligible for a reduced rate of customs duty is issued under section 269P. The application process also includes an invitation for public submissions, as mandated by section 269K.
The Act imposes specific obligations on the parties involved in the TCO process. Firstly, any person who wishes to apply for a TCO must ensure that their application is not in respect of goods listed in section 269SJ, which are ineligible for tariff concessions. Secondly, the CEO has the responsibility of assessing the application to ensure it meets the core criteria stipulated in section 269C. This involves verifying that no substitutable goods were produced in Australia on the day the application was lodged, as per the definitions in sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette inviting submissions from interested parties, as required by section 269K.
Under the Act, there are no specific offences or penalties outlined for the breach of the provisions related to TCOs. However, the implications of failing to comply with the conditions set forth in the Act could include the denial of a TCO application or the imposition of standard customs duties on the goods in question. The Act ensures that the rights of any person, other than the Commonwealth, are not adversely affected by the registration of a TCO, and it does not impose any liabilities on any person in respect of actions taken before the TCO’s effective date. This ensures that the application of TCOs does not disadvantage any individual or entity and maintains the integrity of the customs duty system.