EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011755
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.
Burton Australia Pty Ltd applied for a TCO in respect of certain snow goggles on 09 March 2010.
Instrument
TCO No 1011755 was made on 28 May 2010. It declares that those certain snow goggles 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. 1011755 is taken to have come into force on 09 March 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 administering customs duties and regulations, including the ability to issue Tariff Concession Orders (TCOs) to grant tariff concessions on specific goods. The Customs Act 1901 was introduced to address the need for a structured and systematic approach to the regulation of customs duties and tariffs in Australia. Tariff Concession Instrument No. 1011755, made under the Customs Act 1901, was introduced to provide a tariff concession for certain snow goggles by Burton Australia Pty Ltd. The instrument was enacted to ensure that the application for tariff concession met the core criteria, which includes the condition that no substitutable goods were produced in Australia on the day the application was lodged. This instrument came into effect on the date the application was lodged, and it provides a free rate of duty on the specified snow goggles, thereby benefiting the rights of importers who can now apply for a refund of duty.
Scope and Application
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1011755, pertains to the application process for Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to entities or individuals seeking to import goods for which they wish to avail tariff concessions, specifically in cases where the goods are not produced in Australia and no suitable substitutes exist domestically. The scope of this Act is national, aligning with the overarching authority of the Customs Act 1901, which governs customs duties and related matters across Australia. Exclusions under this legislation include goods specified in section 269SJ of the Act, which are ineligible for tariff concessions. The Act also stipulates that a TCO application must meet the core criteria outlined in sections 269C and 269F, which include the absence of substitutable goods produced in Australia in the ordinary course of business. Any application satisfying these criteria will result in the issuance of a TCO, granting the specified goods a lower rate of customs duty as outlined in the Customs Tariff Act 1995. The instrument came into effect on the date of the application, in this case, 9 March 2010, without retroactive impact on pre-existing rights or liabilities.
Key Provisions
The Tariff Concession Instrument No. 1011755, issued under section 269F of the Customs Act 1901 (the Act), pertains to a specific type of snow goggles applied for by Burton Australia Pty Ltd on 09 March 2010. The instrument, declared on 28 May 2010, establishes that these snow goggles are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, which applies a free rate of duty. This contrasts with the general rate of duty for such goods, which is 5%. This instrument effectively grants a tariff concession, reducing the customs duty on the specified snow goggles.
In accordance with section 269C of the Act, the Chief Executive Officer of Customs (the CEO) is required to consider whether an application for a tariff concession order (TCO) meets the core criteria. Specifically, section 269B of the Act defines 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods', which are critical in determining whether the application is valid. For the snow goggles in question, the CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria. Consequently, the CEO issued a written order declaring that the snow goggles are subject to a zero rate of duty, as specified in item 50 of Schedule 4 to the Tariff.
The Act imposes several obligations on parties applying for a TCO. Under section 269K(1), the CEO must publish a notice in the Gazette, inviting any interested parties to submit reasons why the TCO should not be granted. In this instance, no submissions were received in response to the published notice. Additionally, the Act stipulates that the TCO does not affect the rights of any person as at the date of registration, except for the Commonwealth, nor does it impose any liabilities on any person. This ensures that the rights of importers are protected and beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Under the Act, there are potential consequences for non-compliance with the provisions related to TCOs. While the explanatory statement does not specify particular offences or penalties, breaches of customs regulations generally carry significant civil and criminal penalties. For instance, section 269S of the Act outlines the commencement date for TCOs, which in this case is 09 March 2010. The Customs Act 1901 also provides for various offences and penalties, which could include fines or imprisonment, depending on the severity and intent behind the breach. However, the specific penalties for breaching the provisions related to TCOs are not detailed in the explanatory statement, and would need to be referred to within the broader scope of the Customs Act 1901.