EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014170
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.
York Fitness Australia Pty Ltd applied for a TCO in respect of certain kettle bells on 23 March 2010.
Instrument
TCO No 1014170 was made on 04 June 2010. It declares that those certain kettle bells 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. 1014170 is taken to have come into force on 23 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 the regulation of imports and exports, including the imposition of customs duty on imported goods. To address specific economic and policy needs, the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can lower the customs duty on certain goods. This legislative instrument was introduced to address gaps in the duty structure, particularly for goods that are not produced in Australia and for which there are no substitutable domestic products. The explanatory statement for Tariff Concession Instrument No. 1014170, made under the Customs Act, outlines the process and criteria for granting a TCO to York Fitness Australia Pty Ltd for certain kettlebells. The instrument was enacted to ensure that these goods benefit from a lower rate of customs duty, promoting economic efficiency and supporting the policy objective of facilitating trade.
Scope and Application
The Tariff Concession Instrument No. 1014170, made under Part XVA of the Customs Act 1901, applies to goods for which an application has been made by an individual or entity, such as York Fitness Australia Pty Ltd, seeking a Tariff Concession Order (TCO). This instrument specifically addresses the application for concessionary customs duty rates on certain kettlebells, where the Chief Executive Officer of Customs (CEO) determines that no substitutable goods are produced in Australia in the ordinary course of business. The application of this Act extends to any goods that meet the criteria set out in section 269C, which requires the CEO to evaluate whether the application for a TCO meets the core criteria before granting the concession. The geographic reach of this Act is national, as it pertains to customs duties applicable across Australia under the Customs Act 1901. The instrument does not affect any rights or impose any liabilities on persons other than the Commonwealth, ensuring that existing rights are protected and no new obligations are created for individuals or entities prior to the effective date of the TCO. Furthermore, the TCO does not include any exclusions or exemptions beyond those specified in section 269SJ of the Act, which details goods that cannot be subject to a TCO. The instrument may be further refined or extended through subordinate instruments, ensuring that the application remains flexible and responsive to changing circumstances.
Key Provisions
The key sections of the Customs Act 1901 relevant to Tariff Concession Orders (TCO) are sections 269F, 269C, 269B, 269D, 269E, and 269P. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The meanings of "goods produced in Australia", "ordinary course of business", and "substitutable goods" are defined in sections 269B, 269D, and 269E respectively. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) as per section 269P(3), declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Under the Act, the CEO has the obligation to ensure that any TCO application made does not relate to goods specified in section 269SJ, which are goods that cannot be subject to a TCO. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). In the case of TCO No. 1014170, the CEO did not receive any submissions in response to this invitation.
The Act imposes several requirements on parties and entities it governs. The CEO must ensure that TCO applications meet the specified criteria and do not relate to goods that are ineligible for TCOs. Importers can benefit from the TCO by applying for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations. The TCO does not impose any liabilities on any person.
The Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaches related to the making or non-compliance with TCOs. However, any failure to adhere to the requirements of the Customs Act 1901, including the TCO process, may lead to general enforcement actions under the Act, which could include fines or other legal repercussions. It is essential for all parties involved to comply with the Act to avoid potential legal issues.