EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0948733
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.
Scubapro Uwatec Australia Pty Ltd applied for a TCO in respect of certain buoyancy compensator diving jackets on 15 December 2009.
Instrument
TCO No 0948733 was made on 05 March 2010. It declares that those certain buoyancy compensator diving jackets 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. 0948733 is taken to have come into force on 15 December 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 Parliament of Australia, provides for the imposition of tariffs on imported goods, with specific provisions for tariff concession orders (TCOs) under Part XVA. These provisions address the gap by allowing for the application of lower rates of customs duty on certain goods, provided that no substitutable goods are produced in Australia. The explanatory statement outlines the process for applying for a TCO and the criteria that must be met for the CEO to make such an order. In the case of Scubapro Uwatec Australia Pty Ltd's application for a TCO on certain buoyancy compensator diving jackets, the CEO determined that no substitutable goods were produced in Australia, and thus, the TCO was issued, granting a free rate of duty on these specific goods. The process included public consultation, and the TCO came into effect on the date the application was lodged, without affecting the rights of any person prior to the registration date.
Scope and Application
The Tariff Concession Instrument No. 0948733, issued under the Customs Act 1901, applies to specific buoyancy compensator diving jackets that Scubapro Uwatec Australia Pty Ltd applied for in terms of a Tariff Concession Order (TCO). The Act enables the Chief Executive Officer of Customs to make TCOs which provide for a lower rate of customs duty on certain goods, provided the application meets specific core criteria. These criteria include the absence of substitutable goods produced in Australia on the day the application was lodged, as defined in sections 269D, 269E and 269F of the Act. Once the CEO is satisfied that the application meets these criteria, a TCO is made, and in this case, the diving jackets are subject to a duty rate of free, down from the general rate of 5%. The TCO applies on a national level across Australia and does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO's effective date. The TCO's commencement date is the same as the date the application was lodged, which is 15 December 2009. The TCO does not affect the rights of persons other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0948733 under the Customs Act 1901 (section 269F) allow for the application of a Tariff Concession Order (TCO) in respect of specific goods. If the Chief Executive Officer of Customs (CEO) determines that an application meets the core criteria, such as the absence of substitutable goods produced in Australia (section 269C), they are required to issue a written order (section 269P(3)). This particular instrument (TCO No. 0948733) pertains to certain buoyancy compensator diving jackets, which are now subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, instead of the general rate of 5% (section 269P(3)).
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must assess applications for TCOs to ensure they meet the core criteria, such as verifying the non-existence of substitutable goods produced in Australia (section 269C). The CEO is also required to publish a notice in the Gazette inviting any interested parties to submit submissions if they believe the TCO should not proceed (subsection 269K(1)). Additionally, the Act mandates that the TCO should not affect the rights of any person (other than the Commonwealth) as at the date of registration, ensuring that no existing rights or liabilities are adversely impacted (subsection 269S(1)).
In terms of breaches and penalties, the Act does not specify any particular offences related to the issuance or application of a TCO. However, any misuse or fraudulent application for a TCO could potentially lead to civil or criminal consequences under other relevant provisions of the Customs Act 1901. The maximum penalties for breaches of the Customs Act can be substantial, including fines and imprisonment, depending on the severity and intent of the breach. While specific penalties for TCO-related breaches are not detailed in this instrument, they would fall under the general enforcement provisions of the Act.