EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0941429
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.
Nigami Enterprises Pty Ltd applied for a TCO in respect of certain fitness exercisers on 4 November 2009.
Instrument
TCO No 0941429 was made on 15 January 2010. It declares that those certain fitness exercisers 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. 0941429 is taken to have come into force on 4 November 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, provides a framework for the administration of customs and excise in Australia. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislative mechanism was introduced to address the need for the Australian government to provide tariff concessions on certain goods to support industry development and economic efficiency. Nigami Enterprises Pty Ltd applied for such a concession for certain fitness exercisers, and Tariff Concession Order No. 0941429 was subsequently made on 15 January 2010. This order declared that the specified fitness exercisers are subject to a lower rate of customs duty, effectively reducing the duty from the general rate of 5% to free. The policy objective behind this concession is to facilitate the importation of these goods without imposing additional financial burdens on importers, thereby promoting trade and industry within Australia.
Scope and Application
The Tariff Concession Instrument No. 0941429, made under the Customs Act 1901, applies specifically to certain fitness exercisers imported into Australia. This instrument was issued in response to an application by Nigami Enterprises Pty Ltd and was approved by the Chief Executive Officer of Customs, who determined that no substitutable goods were produced in Australia in the ordinary course of business. The application of this instrument results in the application of a free rate of duty on the specified goods, which otherwise would have been subject to a general rate of 5%. The application process and subsequent decision-making by the CEO are governed by sections 269C, 269B, and 269E of the Customs Act 1901, which define terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." The instrument is effective from the date the application was lodged, 4 November 2009, and does not disadvantage any existing rights or impose new liabilities on parties other than the Commonwealth. Importers of these goods can apply for a refund of duty paid since the effective date of the instrument.
Key Provisions
The main sections of Tariff Concession Instrument No. 0941429, which pertains to the Customs Act 1901, include sections 269C, 269B, 269D, 269E, 269P(3), 269K, and 269S. Section 269C mandates that a Tariff Concession Order (TCO) application meets the core criteria if, on the date of application, no substitutable goods are produced in Australia in the ordinary course of business. Section 269B outlines the meanings of certain terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods." Section 269P(3) states that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, they must issue a written TCO. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions on the TCO application, while section 269S specifies that a TCO comes into force on the day the application is lodged.
The Act imposes obligations on various parties, including the CEO of Customs and applicants for TCOs. The CEO must evaluate whether an application meets the core criteria, defined in section 269C, and must publish a notice in the Gazette inviting submissions under section 269K. Nigami Enterprises Pty Ltd, the applicant, must ensure their application is valid and free from disqualifying conditions as per section 269SJ. Furthermore, the CEO must ensure that no substitutable goods are produced in Australia before issuing a TCO under section 269P(3).
For breaches of the Customs Act 1901, various offences, penalties, and consequences may apply. However, the explanatory statement does not provide specific details about the penalties for non-compliance with the TCO provisions. Generally, breaches of the Customs Act can result in substantial fines and potential imprisonment. The exact penalties would depend on the nature and severity of the breach, as defined under other sections of the Act and relevant regulations. The CEO’s role in enforcing compliance with the Act is crucial to ensuring that all parties adhere to the stipulated conditions and requirements.