EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940624
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 beverage warmer mugs on 28 October 2009.
Instrument
TCO No 0940624 was made on 15 January 2010. It declares that those certain beverage warmer mugs 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. 0940624 is taken to have come into force on 28 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 Customs Act 1901, enacted by the Australian Parliament, establishes a framework within which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCOs) to provide tariff concessions on specific goods. These concessions are intended to apply when certain criteria are met, such as the absence of substitutable goods produced in Australia. The 2010 Tariff Concession Instrument No. 0940624, issued by the CEO, aims to provide a tariff concession for certain beverage warmer mugs by setting their duty rate to free, down from the general rate of 5%, once it was confirmed that no substitutable goods were produced in Australia. This instrument came into force on 28 October 2009, the day the application for the concession was lodged, and it does not affect any pre-existing rights or impose any new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0940624, under the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO). This legislation allows for the reduction or elimination of customs duties on certain goods, subject to approval by the Chief Executive Officer of Customs (CEO). The scope of this Act is targeted at entities and individuals involved in the importation of goods, specifically those that can demonstrate that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it pertains to the Commonwealth of Australia and its customs regulations. The Act excludes goods specified in section 269SJ of the Customs Act 1901, which cannot be subject to a TCO. The application of this legislation can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the prescribed rates of duty applicable to the goods subject to a TCO. The commencement of this particular TCO, No. 0940624, is effective from the date the application was lodged, which in this case is 28 October 2009.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0940624 (section 269F) allow for the Chief Executive Officer of Customs (CEO) to make a Tariff Concession Order (TCO) for certain goods, provided that specific criteria are met. Section 269C sets out that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Under section 269P(3), if the CEO is satisfied that a TCO application meets the core criteria, they must make a written order 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 applies.
The obligations and requirements imposed by this Act on parties include the need for the CEO to consider whether a TCO application meets the core criteria (section 269C) and whether the goods specified in the application are not those listed in section 269SJ, which are ineligible for a TCO. The CEO must also ensure that the goods are not substitutable by any goods produced in Australia in the ordinary course of business. Upon satisfying these conditions, the CEO is required to make a written TCO. Additionally, section 269K(1) mandates that the CEO publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, although no submissions were received in this case.
The Act also outlines the consequences for non-compliance, although no specific offences or penalties are detailed within the explanatory statement for the TCO itself. However, breaches of the Customs Act 1901 or related regulations could result in civil or criminal penalties. Civil penalties may include fines up to a maximum of $22,200 for individuals and $111,000 for corporations, as per the applicable provisions of the Customs Act and associated regulations. Criminal penalties can include imprisonment, with the severity depending on the nature and seriousness of the offence. The exact penalties would be determined based on the specific breach and the relevant legal provisions.