EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1000944
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.
Footcare International applied for a TCO in respect of certain footware laces on 06 January 2010.
Instrument
TCO No 1000944 was made on 26 March 2010. It declares that those certain footware laces 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. 1000944 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 was amended to include the Tariff Concession Instrument No. 1000944, which was enacted to address a gap in tariff concessions for specific goods, particularly in cases where no substitutable goods were produced in Australia. The purpose of this instrument is to facilitate reduced customs duties on certain footware laces as requested by Footcare International, effective from 6 January 2010. The instrument was developed under the authority of the Chief Executive Officer of Customs, who must ensure that any application for a tariff concession order meets the core criteria outlined in the Act, specifically that no substitutable goods are produced in Australia. The instrument was published in the Gazette to invite any objections, none of which were received. The primary policy objective is to benefit importers by allowing them to apply for a refund of duty on goods imported since the Tariff Concession Order came into effect, while ensuring that no existing rights or liabilities are adversely affected.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of tariff concessions on certain goods through the creation of Tariff Concession Orders (TCOs). Specifically, this legislation allows for the Chief Executive Officer of Customs to reduce or eliminate customs duties on specific goods if certain criteria are met. An application for a TCO can be made by any person, provided the goods in question are not specified in section 269SJ of the Act, which excludes particular goods from being subject to a TCO. The application process requires the CEO to assess whether no substitutable goods were produced in Australia on the day the application was lodged, as per section 269C of the Act. This assessment is pivotal in determining if the core criteria set out in section 269B are satisfied. If the CEO determines that the application meets these criteria, a written order declaring the goods eligible for the concession will be issued. The scope of this legislation is national, applying across the Commonwealth of Australia, and it extends to all entities or individuals involved in the importation of the specified goods. The legislation does not specify any exclusions beyond those noted in section 269SJ, and any further elaboration or restriction on its application is left to subordinate instruments.
Key Provisions
The Customs Act 1901, as modified by Tariff Concession Instrument No. 1000944, establishes a framework under which Tariff Concession Orders (TCOs) may be issued by the Chief Executive Officer of Customs (CEO) (section 269F). This legislation allows for a lower rate of customs duty on goods that are the subject of a TCO. In this instance, the CEO must consider an application for a TCO if it does not pertain to goods specified in section 269SJ of the Act, which are ineligible for a TCO. The CEO must assess whether the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must issue a written TCO, as per subsection 269P(3), declaring that the goods are subject to a specified item in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must ensure that applications for TCOs are assessed according to the stipulated criteria. This includes publishing a notice in the Gazette, as required by subsection 269K(1), inviting any interested parties to submit objections or reasons why a TCO should not be made. In this case, no submissions were received, indicating that no objections were raised against the application for the footware laces. Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities in respect of actions taken before the registration date of the TCO.
Breaches of the provisions in the Customs Act 1901 may lead to various civil or criminal consequences. Although specific penalties are not detailed in the explanatory statement, the Act generally provides for penalties for non-compliance with customs regulations. These penalties can include fines and, in more serious cases, imprisonment. The exact penalties would be determined based on the nature and severity of the breach, as outlined in the broader Customs Act 1901 and related legislation. The Act’s provisions are designed to ensure that the process for issuing TCOs is fair, transparent, and in compliance with established legal requirements.