EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1002911
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.
Prestige Pet Products applied for a TCO in respect of certain dog kennels on 15 January 2010.
Instrument
TCO No 1002911 was made on 09 April 2010. It declares that those certain dog kennels 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 7.5%. 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. 1002911 is taken to have come into force on 15 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 Tariff Concession Instrument No. 1002911, enacted in 2010 under the Customs Act 1901, was introduced to address the need for a more flexible approach to customs duties, particularly in cases where certain goods are imported and no locally produced alternatives exist. The Act empowers the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that provide for a reduced or free rate of duty on specified goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. This mechanism is designed to foster competition and benefit consumers by potentially lowering the cost of imported goods. The instrument was made in response to an application from Prestige Pet Products for a TCO on certain dog kennels, where the CEO determined that no suitable Australian-made alternatives were available, thereby satisfying the core criteria for a concession. The instrument's commencement date aligns with the date of the application, ensuring that the benefits of the concession are effective from the outset.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 1002911, applies to any person or entity seeking to import goods into Australia that are subject to tariff concessions. The instrument specifically addresses applications for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs when certain criteria are met, such as the absence of substitutable goods produced in Australia. The geographic reach of the Act and its associated instruments is national, impacting all importers across Australia. This legislation does not apply to goods specified in section 269SJ of the Customs Act, which outlines goods that are ineligible for tariff concessions. The application of the Act may be extended or restricted through subordinate instruments, though specific details are not elaborated in the explanatory statement. The commencement of the TCO is retroactive to the date of the application, ensuring that the rights of importers are protected without imposing new liabilities for actions taken prior to the TCO's effective date.
Key Provisions
The Tariff Concession Order (TCO) No. 1002911 under the Customs Act 1901 (section 269F) was made by the Chief Executive Officer of Customs (CEO) on 9 April 2010. It grants a tariff concession to Prestige Pet Products for certain dog kennels, allowing them to be imported free of the general duty of 7.5% (section 269P(3)). This concession is contingent on the CEO being satisfied that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO must also be satisfied that the goods are not those specified in section 269SJ of the Act, which outlines those that cannot be subject to a TCO.
The obligations imposed by this Act on parties such as Prestige Pet Products and the CEO are stringent. The applicant must ensure that the goods in question meet the criteria for a tariff concession, including the absence of substitutable goods produced in Australia (section 269C). The CEO, upon receiving an application, must promptly assess whether it meets the core criteria and publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, the CEO must proceed to make the TCO if the application is deemed valid.
Failure to comply with the provisions of the Customs Act 1901 may result in various consequences. The Act does not explicitly state the penalties for non-compliance with the tariff concession application process. However, general provisions within the Customs Act may apply, including fines or imprisonment for offences related to the importation of goods. The specific penalties for breaches related to TCOs are not detailed in the provided explanatory statement but could be subject to the broader enforcement mechanisms within the Act.
The commencement of TCO No. 1002911 is deemed to have occurred on the date the application was lodged, 15 January 2010 (subsection 269S(1)). This means that from that date, the tariff concession is effective, although the formal order was made later. The rights of persons importing these goods will be positively affected, with importers potentially eligible for refunds of duty paid on goods imported since the effective date (paragraph 126(1)(r) of the Regulations). Importantly, the TCO does not impose any new liabilities on any person and does not disadvantage any person by affecting their rights as they stood on the date of registration.