EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0943201
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.
Srixon applied for a TCO in respect of certain golf balls on 16 November 2009.
Instrument
TCO No 0943201 was made on 29 January 2010. It declares that those certain golf balls 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. 0943201 is taken to have come into force on 16 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, establishes a framework for the imposition and management of customs duties on imported goods. It includes provisions for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce or eliminate customs duty on certain goods. This mechanism was introduced to address the issue of ensuring that Australian industries remain competitive by reducing costs associated with imported goods where no domestic alternatives exist. The policy objective behind this is to encourage trade and support industries that may otherwise be hindered by high import duties. The Tariff Concession Instrument No. 0943201, made under this Act, provides a tariff concession for certain golf balls, which reduces the duty on these goods from 5% to free, effective from the date the application was lodged. This measure benefits importers by potentially reducing their costs and improving the competitiveness of the goods in the Australian market.
Scope and Application
The Tariff Concession Instrument No. 0943201 applies to the particular golf balls for which Srixon applied on 16 November 2009, under Part XVA of the Customs Act 1901. This Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), which lower the customs duty on specific goods. The application of this Instrument is triggered when no substitutable goods, meaning those that could replace the subject goods in Australia, are produced in the ordinary course of business. The CEO’s decision to issue a TCO is subject to the core criteria outlined in the Act, specifically that the application must not be in respect of goods excluded under section 269SJ and must meet the conditions of sections 269C, 269B, and 269D. The Instrument’s geographic reach is Commonwealth-wide, with its effects extending to all relevant imports into Australia. The application of the TCO does not disadvantage or impose liabilities on any person except the Commonwealth, and it does not affect rights or liabilities incurred before its effective date, which is 16 November 2009. The scope of this legislation is further extended through subordinate instruments which provide detailed rules and exceptions that may apply to specific cases.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0943201, made under the Customs Act 1901, revolve around the establishment of tariff concessions for certain goods, namely golf balls in this instance. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the CEO determines that the application is valid and meets the core criteria outlined in sections 269C and 269B, a TCO can be issued. Section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. The CEO must then make a written TCO, as per section 269P(3), which declares that the goods in question are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995. This particular TCO, No. 0943201, pertains to certain golf balls and declares that these are subject to item 50 of the Tariff, resulting in a duty rate of free instead of the general 5%.
The obligations imposed by the Act on the parties involved primarily rest on the CEO of Customs. The CEO must ensure that any TCO application complies with the stipulated criteria, particularly those outlined in sections 269C and 269B. This involves confirming that no substitutable goods were produced in Australia on the date of the application. Furthermore, the CEO is required to publish a notice in the Gazette under subsection 269K(1) once an application is accepted as valid, inviting any interested parties to lodge submissions if they believe the TCO should not be made. This transparency step is crucial to ensuring that all potential objections are considered before the TCO is issued.
In terms of legal consequences, the Act does not explicitly outline specific offences or penalties for breaches related to TCOs. However, the general framework of the Customs Act 1901, which governs the creation and enforcement of TCOs, includes provisions for penalties and enforcement actions for non-compliance with customs regulations. These could potentially include fines, imprisonment, or other civil or criminal penalties, depending on the nature and severity of the breach. The specifics of these penalties would be detailed elsewhere in the Customs Act 1901 and associated regulations. The TCO itself does not impose any liabilities on any person but ensures that the rights of importers will be beneficially affected, as per subsection 269S(1), and they can apply for a refund of duty on goods imported since the day the TCO came into force under paragraph 126(1)(r) of the Regulations.