EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942113
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.
Josco Group applied for a TCO in respect of certain handheld brushes on 9 November 2009.
Instrument
TCO No 0942113 was made on 12 March 2010. It declares that those certain handheld brushes 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. 0942113 is taken to have come into force on 9 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 was enacted to regulate the importation and exportation of goods in Australia, including the imposition of customs duties. Tariff Concession Instrument No. 0942113, introduced in 2010, addresses the gap in tariff concessions for specific goods by allowing the Chief Executive Officer of Customs to apply lower customs duty rates on certain goods, provided no substitutable goods are produced in Australia. This instrument was created to support economic objectives by facilitating the import of specific goods at reduced tariff rates, thereby potentially lowering costs for consumers and businesses reliant on these imports. The instrument was developed following an application by Josco Group for tariff concessions on certain handheld brushes, which was approved as no substitutable goods were being produced domestically. The policy objective, as outlined in the Act, is to ensure that such tariff concessions do not disadvantage any person other than the Commonwealth and do not impose any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0942113 is an instrument made under Part XVA of the Customs Act 1901, which establishes a scheme for the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any individual or entity that seeks a concession on customs duty for specific goods, provided that the goods in question are not specified in section 269SJ of the Act and that no substitutable goods are produced in Australia. The instrument outlines the process for applying for a TCO and the criteria that the CEO must consider in deciding whether to grant the concession, including the absence of substitutable goods produced in Australia in the ordinary course of business. The geographic reach of this Act is national, applying across Australia under Commonwealth law. The commencement date of this specific TCO is the date on which the application was lodged, 9 November 2009, and the application of the concession is retrospective to this date. The Act does not impose any liabilities on persons other than the Commonwealth and does not affect existing rights as of the registration date.
Key Provisions
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269F). These orders lower the customs duty on particular goods. An application for a TCO can be submitted by any person, but it must not be for goods listed in section 269SJ of the Act, which are ineligible for tariff concessions. For an application to proceed, the CEO must be convinced that no substitutable goods are being produced in Australia in the ordinary course of business (section 269C). Definitions for terms like 'substitutable goods', 'goods produced in Australia', and 'ordinary course of business' are provided in sections 269B, 269D, and 269E respectively. If the CEO confirms that the application meets the core criteria, a written order declaring the goods eligible for a prescribed item of Schedule 4 to the Customs Tariff Act 1995 is issued (section 269P(3)).
The obligations under this legislation for entities such as Josco Group, which applied for a TCO, include ensuring their application is valid and that no substitutable goods are being produced in Australia. The CEO, in turn, has the obligation to review applications, determine whether they meet the core criteria, and make a decision on whether to issue a TCO. The CEO is also required to publish a notice in the Gazette inviting submissions from the public if they believe the TCO should not be granted (subsection 269K(1)). If no objections are received, the TCO is finalised and comes into effect on the day the application was lodged (subsection 269S(1)).
Breach of the conditions under this Act can result in significant legal consequences. While the explanatory statement does not explicitly outline the penalties for non-compliance, it is understood that breaches could be subject to the general penalties outlined in the Customs Act 1901. These penalties can include fines and imprisonment for serious breaches, as well as civil penalties for less severe infractions. The exact penalties would depend on the nature and severity of the breach, and would be determined in accordance with the relevant provisions of the Customs Act 1901 and any associated regulations.