EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0949854
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.
Anaconda Stores applied for a TCO in respect of certain knife sets on 22 December 2009.
Instrument
TCO No 0949854 was made on 12 March 2010. It declares that those certain knife sets 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. 0949854 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0949854, enacted in 2010, provides a concession on customs duties for certain goods in line with the Customs Act 1901. This instrument was introduced to address the gap in duty concessions for goods that are not produced in Australia and for which there are no substitutable goods available domestically. The instrument was enacted by the Chief Executive Officer of Customs, pursuant to the authority granted under the Customs Act 1901, with the policy objective of facilitating trade by reducing the cost of imported goods. The instrument specifically applies to knife sets, declaring them to be subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, as no substitutable goods were produced in Australia. The concession does not affect any pre-existing rights or liabilities, and importers of these goods can apply for a refund of duty paid since the effective date of the concession.
Scope and Application
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) under which the Chief Executive Officer of Customs may reduce the rate of customs duty for certain goods. This legislation applies to any person who can demonstrate that the goods they are importing are not being produced in Australia and that there are no substitutable goods available domestically. The application of this Act is national in scope, with its jurisdiction extending across the Commonwealth of Australia. Any individual or entity looking to import goods that qualify for a reduced duty rate under this scheme must ensure that their application adheres to the core criteria specified in sections 269C and 269SJ of the Act. Once a TCO is issued, it comes into effect from the date the application was lodged, and it allows the specified goods to be imported duty-free. Importantly, the TCO does not affect the rights of any person in relation to transactions conducted before the date of registration, and it does not impose any liabilities on individuals or entities other than the Commonwealth. The Act also allows for the possibility of subordinate instruments to further define or refine the application of TCOs.
Key Provisions
The primary operative sections of this legislation (sections 269F, 269C, 269B, 269P(3) and 269S) establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to be made to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the CEO determines that the application is valid and meets the core criteria outlined in section 269C, a TCO is issued. Section 269B defines key terms such as "goods produced in Australia" and "ordinary course of business," while section 269P(3) mandates the CEO to issue a written TCO order if satisfied that the application meets the criteria. The TCO instrument, number 0949854, declares that certain knife sets are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free instead of the general rate of 5%.
The Act imposes several obligations and requirements on the parties involved. The CEO must ensure that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged, as per section 269C. Additionally, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). The CEO must also consider any submissions received before making a final decision on the application. Furthermore, the TCO does not affect any person's rights as at the date of registration, nor does it impose liabilities on any person for actions taken before the registration date.
There are no specific offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breaching the provisions of the Customs Act 1901 or the TCO. However, it is essential to note that any failure to comply with the requirements of the Act or the TCO may lead to legal consequences. For instance, if an entity fails to meet the criteria for a TCO or submits false information, it could result in the TCO being revoked or other legal actions being taken against the entity. Additionally, any person found to be in breach of the Customs Act 1901 may face penalties, including fines and imprisonment, as per the relevant sections of the Act.