EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1010094
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.
Korjo Travel Products applied for a TCO in respect of certain travel sets on 26 February 2010.
Instrument
TCO No 1010094 was made on 14 May 2010. It declares that those certain travel sets 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. 1010094 is taken to have come into force on 26 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 Tariff Concession Instrument No. 1010094 was enacted under the Customs Act 1901 to address a specific need for tariff concessions for certain imported goods. The Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for applying lower rates of customs duty to goods via Tariff Concession Orders (TCOs). In this instance, Korjo Travel Products sought a concession on certain travel sets, and upon application, the Chief Executive Officer of Customs (CEO) determined that no substitutable goods were produced in Australia, thus satisfying the core criteria for a TCO. The resulting Instrument No. 1010094, published on 14 May 2010, declares that these travel sets are subject to a free rate of duty, as opposed to the general rate of 5%, and took effect from the date the application was lodged, 26 February 2010. The policy objective here is to facilitate the importation of goods that are not domestically produced, thereby supporting competitive markets and consumer access to a broader range of products.
Scope and Application
The Tariff Concession Instrument No. 1010094, made under Part XVA of the Customs Act 1901, applies to specific goods that are the subject of a Tariff Concession Order (TCO). The instrument was made in response to an application by Korjo Travel Products for a TCO on certain travel sets, which were granted a tariff concession to be free of the usual 5% customs duty, applicable to item 50 of Schedule 4 to the Customs Tariff Act 1995. The application must meet the core criteria outlined in the Customs Act, primarily that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The CEO, after being satisfied with the application, issued TCO No. 1010094, which became effective on 26 February 2010, the date the application was lodged. This instrument does not disadvantage or impose any liabilities on any person other than the Commonwealth and benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force. The CEO published a notice in the Gazette inviting submissions on the application, but none were received.
Key Provisions
The primary operative sections of this legislation, specifically Tariff Concession Instrument No. 1010094, revolve around the establishment of a Tariff Concession Order (TCO) under section 269F of the Customs Act 1901. This instrument mandates the application process for TCOs, whereby a person can apply to the Chief Executive Officer (CEO) of Customs for a TCO concerning specific goods. The CEO must determine if the application aligns with the core criteria set out in section 269C, ensuring that no substitutable goods are produced in Australia at the time of application (section 269P(3)). If these conditions are met, the CEO must issue a written TCO. This particular TCO No. 1010094, issued on 14 May 2010, declares that certain travel sets are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, granting them a zero rate of duty, down from the general 5% duty rate.
In terms of obligations and requirements, the Act imposes specific duties on both applicants and the CEO. Applicants must ensure their submissions meet the criteria outlined in section 269C and provide sufficient evidence that no substitutable goods are produced in Australia. The CEO, upon receiving an application, must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not proceed. If no objections are received, the CEO is obligated to issue the TCO if the application meets the criteria. Additionally, under section 269K(1), the CEO must consult with relevant stakeholders as soon as practicable after accepting the application as valid.
The legislation also outlines the potential consequences for non-compliance with the TCO provisions. While the explanatory statement does not specify detailed penalties, breaches of the Customs Act 1901 can lead to both civil and criminal penalties. For example, under section 269S of the Act, failure to comply with the terms of a TCO could result in fines and potential criminal charges, depending on the severity and intent of the breach. Although the maximum penalties are not explicitly stated in this particular instrument, they can be substantial under the broader Customs Act framework. Additionally, the Act ensures that the rights of individuals, particularly importers, are protected, and the TCO does not impose any liabilities on persons other than the Commonwealth.