EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1024607
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.
Cat and Co Pty Ltd applied for a TCO in respect of certain eyelash supports on 02 June 2010.
Instrument
TCO No 1024607 was made on 30 August 2010. It declares that those certain eyelash supports 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. 1024607 is taken to have come into force on 02 June 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, established a framework for the imposition of customs duties on goods imported into Australia. The Act includes provisions for Tariff Concession Orders (TCOs) under Part XVA, allowing the Chief Executive Officer of Customs to reduce or eliminate customs duties on specific goods. This provision was introduced to address the issue of ensuring fair trade practices by mitigating the impact of customs duties on certain goods, particularly those that are not produced domestically or for which there are no suitable substitutes. In the case of Tariff Concession Instrument No. 1024607, the instrument was enacted to provide a concession on customs duties for certain eyelash supports, which were found to have no substitutable goods produced in Australia, thus meeting the core criteria for a TCO. The policy objective is to promote efficient and competitive markets by reducing the cost of imported goods where appropriate, thereby benefiting importers and consumers.
Scope and Application
The Customs Act 1901 applies to any person or entity involved in the importation of goods into Australia and provides a framework for the administration of customs duties and other regulations concerning imports and exports. Specifically, Part XVA of the Act governs the process for Tariff Concession Orders (TCOs), which are issued by the Chief Executive Officer of Customs (the CEO) to lower the rate of customs duty on certain goods. The application of TCOs is limited to goods not specified in section 269SJ of the Act, and the CEO must determine if the goods in question meet the core criteria, particularly if no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this legislation is national, applying across all states and territories of Australia. The TCO No. 1024607, for example, applies to certain eyelash supports, reducing their duty from 5% to free, effective from the date the application was lodged, 02 June 2010. The application process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions from interested parties, although in this case, no submissions were received. This instrument does not retroactively affect any rights or liabilities incurred prior to its registration.
Key Provisions
The main operative sections of the legislation (section 269C and section 269P(3)) establish the criteria for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). If the CEO is satisfied that a TCO application meets the core criteria, which includes the absence of substitutable goods produced in Australia, the CEO is required to make a written order declaring the goods to which the concession applies (section 269P(3)). This order is published in the Gazette, allowing for public consultation before the order becomes effective (section 269K(1)). The concession, once made, applies to the goods from the date the application was lodged (section 269S(1)).
The Customs Act 1901 imposes specific obligations on both the applicants for TCOs and the CEO. For applicants, the key obligation is to ensure that their application is not in respect of goods specified in section 269SJ, which are ineligible for a TCO. The CEO, on receiving a valid application, must publish a notice in the Gazette inviting submissions from any person who may have reasons for opposing the concession. The CEO must also ensure that the application meets the core criteria outlined in section 269C, specifically the absence of substitutable goods produced in Australia. Upon meeting these criteria, the CEO is mandated to make a TCO (section 269P(3)).
The Act outlines consequences for non-compliance with the requirements and provisions set out in the TCO. However, specific offences, penalties, or civil/criminal consequences for breach are not detailed in the provided explanatory statement. The focus of the statement is on the procedural aspects of TCO creation and the criteria for their approval. Therefore, while the Act provides a framework for the imposition of tariffs and concessions, the specific penalties for breach are not outlined in the explanatory statement.