EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1021969
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.
E.d Oates Pty Ltd applied for a TCO in respect of certain mops on 17 May 2010.
Instrument
TCO No 1021969 was made on 09 August 2010. It declares that those certain mops 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. 1021969 is taken to have come into force on 17 May 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. 1021969 was enacted in 2010 as part of the Customs Act 1901, designed to provide relief on customs duties for specific goods that meet certain criteria. This legislation was introduced to address the gap in the tariff structure by offering tariff concessions to goods for which no substitutable goods are produced in Australia. This mechanism aims to stimulate the importation of goods that are not domestically manufactured, potentially fostering economic activity and market competition. The instrument was enacted by the Australian Parliament and its policy objective is to provide a streamlined process for granting tariff concessions, ensuring that the application process is both efficient and responsive to the needs of importers.
The Customs Act 1901, overseen by the Chief Executive Officer of Customs, allows for the application of tariff concession orders (TCOs) when specific conditions are met, such as the absence of substitutable goods produced in Australia. In this case, E.d Oates Pty Ltd successfully applied for a TCO for certain mops, resulting in a tariff concession that effectively reduced the duty from 5% to free. The legislative framework ensures that the rights of existing importers are protected, and no new liabilities are imposed on any party, thus maintaining a balance between economic incentives and legal certainty.
Scope and Application
The Tariff Concession Instrument No. 1021969 applies to the import of certain mops by imposing a concessional rate of customs duty, which is zero, instead of the general rate of 5%. This instrument is a direct application of Part XVA of the Customs Act 1901, which governs the scheme for Tariff Concession Orders (TCOs) that can be made by the Chief Executive Officer of Customs (CEO). The CEO assesses applications for TCOs based on whether the goods are not substitutable by any goods produced in Australia in the ordinary course of business, as outlined in sections 269C and 269D of the Act. The instrument was made following an application by E.d Oates Pty Ltd on 17 May 2010, and it came into effect on the same day, as stipulated by subsection 269S(1) of the Act. The TCO applies nationally and does not disadvantage any person other than the Commonwealth nor impose liabilities on any person for actions taken prior to the date of registration. It is also noted that no objections were received in response to the publication of the application in the Gazette, as required by subsection 269K(1) of the Act.
Key Provisions
The primary sections of Tariff Concession Instrument No. 1021969 under the Customs Act 1901 (section 269F) establish the process by which Tariff Concession Orders (TCOs) are applied for and granted by the Chief Executive Officer of Customs (section 269C, 269P(3)). These sections detail the criteria that must be met for an application to be considered, specifically that no substitutable goods are produced in Australia in the ordinary course of business (section 269D, 269E). If the application meets these core criteria, the CEO must issue a written order declaring the goods subject to the TCO (section 269P(3)). This particular instrument, TCO No. 1021969, was applied for on 17 May 2010 by E.d Oates Pty Ltd for certain mops and was made on 9 August 2010. It specifies that these mops are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, with the general duty rate of 5% being reduced to free under the TCO.
The obligations imposed by the Customs Act 1901 on parties subject to the TCO include the requirement for the CEO to publish a notice in the Gazette inviting submissions on the proposed TCO (subsection 269K(1)). Additionally, the CEO must ensure that the application meets the core criteria set out in section 269C before issuing the TCO. In this case, no submissions were received in response to the published notice, indicating no objections to the concession. The TCO is deemed to have come into force on the day the application was lodged, which is 17 May 2010, as per subsection 269S(1). The rights of importers are positively affected by this concession, as they can apply for a refund of duty on goods imported since the effective date of the TCO under paragraph 126(1)(r) of the Regulations.
Failure to comply with the obligations or provisions of the Customs Act 1901 or the Tariff Concession Instrument No. 1021969 may result in penalties. While specific penalties for non-compliance with TCOs are not detailed in the explanatory statement, general penalties under the Customs Act 1901 for non-compliance with customs regulations can include fines and imprisonment. The maximum penalties can vary depending on the severity and intent behind the breach. For instance, knowingly importing goods that should be subject to duty but are falsely claimed to be exempt can lead to significant fines and imprisonment, reflecting the seriousness of evading customs duty.