EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000796
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.
Ozito Industries applied for a TCO in respect of certain lawn mowers on 06 January 2010.
Instrument
TCO No 1000796 was made on 22 March 2010. It declares that those certain lawn mowers
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. 1000796 is taken to have come into force on 06 January 2010.
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, established a framework for the administration of customs and excise duties, among other things. The Act, specifically under Part XVA, introduced a scheme to facilitate Tariff Concession Orders (TCOs), allowing the Chief Executive Officer of Customs to reduce or exempt customs duties on certain goods. This mechanism was designed to address the gap in providing tariff relief for imported goods that could not be produced domestically, thereby fostering fair competition and potentially lowering costs for consumers. Instrument No. 1000796, made under the authority of this Act, granted tariff concessions to Ozito Industries for specific lawn mowers, reducing the duty from 5% to free, effective from the date of the application, 6 January 2010. This initiative aligns with the policy objective of promoting efficient market practices and aiding businesses by reducing the financial burden of import duties on specified goods.
Scope and Application
The Customs Act 1901, through its Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) which apply lower rates of customs duty to certain goods. The Act applies to any person or entity wishing to apply for a TCO for goods not specified in section 269SJ, which outlines goods that are ineligible for a TCO. The application process is contingent upon the CEO determining that no substitutable goods are produced in Australia at the time the application is lodged, and that the application meets the core criteria set out in sections 269C and 269D of the Act. Once a TCO is issued, it applies nationally, with the specific concession in this case applying to certain lawn mowers. The geographic reach of this legislation is therefore national, as it pertains to the application of customs duties across Australia. The Act does not specify exclusions or exemptions beyond those goods listed in section 269SJ, and the application process is further detailed and potentially expanded through subordinate instruments such as the Customs Regulations 1996.
Key Provisions
The key provisions of the Tariff Concession Instrument No. 1000796, as outlined in the Customs Act 1901, revolve around the application and creation of Tariff Concession Orders (TCOs) to apply lower rates of customs duty on specific goods. Section 269F of the Act allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question are not those specified in section 269SJ, which are ineligible for tariff concessions. Section 269C stipulates that for an application to meet the core criteria, it must be established that no substitutable goods are produced in Australia at the time of application. This is further clarified by section 269B, which defines "goods produced in Australia," "ordinary course of business," and "substitutable goods" relevant to the TCO application. Once the CEO is satisfied that the application meets these criteria, section 269P(3) mandates the creation of a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations imposed by the Act on the parties involved are primarily centred on the application process and the CEO's decision-making. For applicants, it is essential to ensure that the goods specified in the TCO application are not substitutable goods produced in Australia and that the application is made in accordance with the Act's provisions. The CEO is required to rigorously assess each application against the core criteria, verify the absence of substitutable goods, and make a decision based on these assessments. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. The CEO's duty to consider these submissions, if any, further ensures a transparent and fair process.
In terms of consequences for breach or non-compliance, the Act does not explicitly outline specific offences or penalties related to the TCO process itself. However, the Act's overarching framework implies that any misrepresentation or failure to comply with the requirements for a TCO application could lead to legal repercussions. The Customs Act 1901 and related legislation, such as the Customs Tariff Act 1995, may impose penalties for incorrect declarations or fraudulent activities related to customs duties. Typically, penalties for such breaches can include fines and, in severe cases, criminal charges. The exact penalties would be determined based on the specific breach and the relevant provisions of the Act or associated regulations.