EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1009675
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.
Edgar Edmondson applied for a TCO in respect of certain mop heads on 24 February 2010.
Instrument
TCO No 1009675 was made on 07 May 2010. It declares that those certain mop heads 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. 1009675 is taken to have come into force on 24 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, enacted by the Australian Parliament, provides a framework for the imposition of customs duty on imported goods. Specifically, Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. The problem or gap addressed by this legislation is the need for a mechanism to provide tariff relief on goods that are not produced domestically and for which there are no suitable substitutes available in the Australian market. This is achieved through the application process outlined in section 269F of the Act, where individuals or entities can apply for a TCO if the goods in question meet the specified criteria, including the absence of substitutable goods produced in Australia. The policy objective is to support industries and consumers by reducing the cost of imported goods, thereby promoting fair trade practices and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 1009675, made under the Customs Act 1901, applies to goods specified in the instrument, namely certain mop heads. This instrument provides a concession by reducing the customs duty on these mop heads from a general rate of 7.5% to free, provided the mop heads meet the criteria outlined in the Act. The application for the concession was lodged by Edgar Edmondson on 24 February 2010, and the instrument was issued on 7 May 2010 after the Chief Executive Officer of Customs confirmed that no substitutable goods were produced in Australia at the time of the application. The instrument is applicable under the Commonwealth jurisdiction and affects the importation of these specific mop heads. There were no submissions opposing the tariff concession, and it came into force on the date the application was lodged. Importantly, the TCO does not disadvantage any existing rights of persons other than the Commonwealth nor impose liabilities on any person for actions taken prior to the instrument's registration. Importers stand to benefit from this concession, as they may apply for a refund of duty paid on these mop heads since the effective date of the TCO.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 1009675, under the Customs Act 1901, detail the process and criteria for granting a Tariff Concession Order (TCO). Section 269F allows an individual, such as Edgar Edmondson, to apply for a TCO in respect of specific goods. The CEO of Customs must then determine if the application meets the core criteria set out in section 269C, which involves assessing whether substitutable goods are being produced in Australia at the time of the application. If the application meets these criteria, the CEO is mandated to issue a written TCO under section 269P(3). In this case, the CEO issued TCO No. 1009675 for certain mop heads, declaring them as subject to a particular item of Schedule 4 in the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 7.5%.
The Act imposes certain obligations on the CEO and applicants. For instance, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any interested parties regarding the proposed TCO. This ensures transparency and allows for public input before the order is made. Additionally, section 269S(1) specifies that a TCO comes into force on the day the application is lodged. In this instance, TCO No. 1009675 is considered effective from 24 February 2010, the date of application.
Regarding consequences for non-compliance, the Act does not explicitly outline offences or penalties for failing to adhere to the provisions of a TCO. However, any breach of customs regulations, including misuse of a TCO, could potentially lead to civil or criminal consequences under other sections of the Customs Act 1901. Such breaches might incur fines or imprisonment, although specific penalties are not detailed within the TCO itself but are subject to broader customs legislation. The Act ensures that the rights of non-Commonwealth entities are protected and that no liabilities are imposed retroactively as a result of the TCO, thus safeguarding the interests of importers who may apply for duty refunds on goods imported since the TCO's effective date.