EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1005695
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.
Thomic Australia applied for a TCO in respect of certain art carriers on 02 February 2010.
Instrument
TCO No 1005695 was made on 23 April 2010. It declares that those certain art carriers 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. 1005695 is taken to have come into force on 02 February 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 enacted to provide a framework for managing customs and excise duties, and includes provisions for Tariff Concession Orders (TCOs) that reduce customs duty on certain goods. This legislative instrument, F2010L01988, was introduced to address the need for tariff concessions on specific goods, in this case, certain art carriers. The Tariff Concession Instrument No. 1005695 was created following an application by Thomic Australia on 2 February 2010, which was subsequently approved by the Chief Executive Officer of Customs (CEO) on 23 April 2010. The policy objective behind this concession is to facilitate the importation of goods that are not produced domestically in a substitutable form, thus ensuring that importers are not at a competitive disadvantage. The instrument was enacted by the CEO in accordance with section 269F of the Customs Act 1901 and does not impose any new liabilities or adversely affect the rights of any person as at the date of its registration.
Scope and Application
The Tariff Concession Instrument No. 1005695 applies to individuals or entities that import certain art carriers, specifically those covered by the instrument. This legislation operates under the Customs Act 1901 and is enacted to provide a lower rate of customs duty for these specific goods. The instrument was initiated by Thomic Australia, which applied for tariff concessions concerning certain art carriers. The scope of this legislation is confined to the application of a TCO for these goods, ensuring that if no substitutable goods are produced in Australia, a lower duty rate can be applied. The instrument was issued on 23 April 2010 and is effective from 02 February 2010, the date the application was lodged. This legislation does not extend to any goods specified in section 269SJ of the Customs Act 1901, which are ineligible for tariff concessions. The instrument allows for the exemption of duty for these goods, benefiting importers by potentially allowing them to apply for a refund of duty paid on imports since the effective date of the concession.
Key Provisions
The Customs Act 1901 (the Act) facilitates the application of lower customs duty rates through Tariff Concession Orders (TCOs), as detailed in Part XVA. Specifically, section 269F allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of certain goods. If the CEO determines that the application does not pertain to goods listed in section 269SJ, which are ineligible for a TCO, they must then assess whether the application meets the core criteria outlined in section 269C. For a TCO application to meet these criteria, it must be established that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties involved are significant. For instance, section 269B and related sections define key terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', which are integral to determining the eligibility of a TCO application. Furthermore, the CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the proposed TCO. In the case of Thomic Australia's application for a TCO on art carriers, no submissions were received in response to the published notice, indicating no objections were lodged.
Under the Act, the CEO is required to make a written TCO if satisfied that the application meets the core criteria. This was demonstrated in TCO No. 1005695, which was made on 23 April 2010 for certain art carriers, declaring that these goods are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thereby granting them a duty-free status. Additionally, subsection 269S(1) specifies that a TCO is deemed to come into effect on the date the application was lodged, thus TCO No. 1005695 is effective from 02 February 2010.
The Act also outlines the consequences of breaching its provisions. While specific offences and penalties are not detailed within the explanatory statement, it is implied that any non-compliance with the terms of a TCO or the application process could lead to legal ramifications. Importers and other affected parties must adhere to the Act's stipulations to avoid potential civil or criminal penalties, though the exact nature and severity of these consequences are not explicitly stated in the provided text.