EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014169
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.
B Box For Kids applied for a TCO in respect of certain nappy caddies on 22 March 2010.
Instrument
TCO No 1014169 was made on 11 June 2010. It declares that those certain nappy caddies 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. 1014169 is taken to have come into force on 22 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 Parliament of Australia, establishes a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO). This Act was introduced to provide relief on customs duties for specific goods, ensuring that Australian consumers benefit from reduced prices and that Australian industries remain competitive. The Act allows for the application of lower rates of customs duty to goods that are subject to a TCO, provided that no substitutable goods are produced in Australia in the ordinary course of business. This policy objective aims to protect Australian industries from unfair competition and to support the availability of certain goods at more affordable prices for consumers.
Tariff Concession Instrument No. 1014169, made on 11 June 2010, is an example of this legislative framework in action, as it grants a tariff concession for certain nappy caddies, reducing their duty from 5% to free. This specific TCO was introduced following an application by B Box For Kids, and it came into force on 22 March 2010, the date the application was lodged. The CEO was satisfied that no substitutable goods were produced in Australia, meeting the core criteria set out in the Customs Act 1901. This concession benefits importers by allowing them to apply for a refund of duty on goods imported since the TCO came into force, without imposing any liabilities on individuals or entities other than the Commonwealth.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the scheme for Tariff Concession Orders (TCOs) which can be made by the Chief Executive Officer of Customs (the CEO). This Act applies to any person who may apply for a TCO concerning goods, provided the application does not relate to goods specified in section 269SJ of the Act. The application process requires the CEO to determine whether it meets the core criteria set out in section 269C, which is contingent on the absence of substitutable goods produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. The CEO must issue a written order if satisfied that the application meets these criteria, and the order will specify that the goods in question are subject to a particular rate of customs duty as outlined in Schedule 4 to the Customs Tariff Act 1995. For example, Tariff Concession Order No. 1014169, issued on 11 June 2010, concerns certain nappy caddies, applying a zero rate of duty instead of the general rate of 5%. The CEO is also required to publish a notice in the Gazette inviting any interested party to submit reasons against the TCO; however, no such submissions were received for this particular order. The TCO's commencement date is the date the application was lodged, and it does not retroactively affect any person's rights or impose liabilities for actions prior to the order's registration.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows any person to apply to the CEO for a TCO concerning specific goods. If the CEO determines that the application pertains to goods that are not listed in section 269SJ of the Act, which outlines those goods ineligible for a TCO, the CEO then evaluates whether the application satisfies the core criteria as specified in section 269C. According to this section, an application meets the core criteria if, on the date the application is submitted, no substitutable goods are being produced in Australia as part of the ordinary course of business.
To understand the obligations imposed by the Act, it is crucial to define key terms. Section 269D interprets "goods produced in Australia", section 269E defines "ordinary course of business", and section 269D also explains "substitutable goods" as those produced in Australia that can be used interchangeably with the goods in question. If the CEO is convinced that the application meets these core criteria, section 269P(3) mandates that the CEO issue a written TCO order, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods.
In the case of Tariff Concession Order No. 1014169, Box For Kids applied for a TCO regarding certain nappy caddies on 22 March 2010. This TCO was issued on 11 June 2010, declaring that these specific nappy caddies qualify for item 50 of Schedule 4 to the Tariff, as the CEO confirmed that no substitutable goods were produced in Australia. The general duty rate on these goods is 5%, but the rate for the goods subject to the TCO is set at free. Furthermore, subsection 269K(1) requires the CEO to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted. In this instance, no submissions were received.
The consequences of breaching the provisions of this Act can be significant. While the explanatory statement does not explicitly detail offences or penalties, the Act generally provides for both civil and criminal penalties for non-compliance with its provisions. These penalties can include fines and, in more severe cases, imprisonment. The exact penalties would depend on the specific breach and would be determined in accordance with the relevant sections of the Customs Act 1901 and any associated regulations.