EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1042990
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.
Wangara Horticultural Supplies applied for a TCO in respect of certain planter bags on 17 September 2010.
Instrument
TCO No 1042990 was made on 13 December 2010. It declares that those certain planter bags 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. 1042990 is taken to have come into force on 17 September 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 Commonwealth Parliament, provides a framework for the regulation of customs and excise duties, including the establishment of a scheme for Tariff Concession Orders (TCOs). This scheme was introduced to address the issue of ensuring that Australian businesses have access to necessary imported goods at reduced customs duty rates, provided no substitutable goods are produced domestically. The instrument, Tariff Concession Instrument No. 1042990, was introduced to provide tariff concessions for certain planter bags, acknowledging that no equivalent products were being produced in Australia. The policy objective of this measure is to support local businesses by reducing the cost of importing specific goods, thereby encouraging trade and economic activity without disadvantaging existing rights or imposing new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically through Part XVA, provides the framework for the creation of Tariff Concession Orders (TCO) which lower the rate of customs duty on certain goods. This legislation applies to any person or entity that imports goods into Australia, as they can apply for a TCO if no substitutable goods are being produced in Australia. The CEO of Customs is responsible for assessing these applications and determining whether they meet the core criteria, which involves ensuring that the application is not in respect of goods that cannot be subject to a TCO, and that no substitutable goods are produced in Australia in the ordinary course of business. The geographic reach of this Act is national, as it applies across all states and territories in Australia, with the TCOs impacting the importation of specific goods. The Act does not specify exclusions or exemptions, but it does outline that a TCO does not affect the rights of a person, other than the Commonwealth, in a way that would disadvantage them or impose liabilities for actions taken prior to the TCO's registration. The application and scope of the Act can be further extended or restricted through subordinate instruments such as regulations or notifications.
Key Provisions
The Tariff Concession Instrument No. 1042990 under the Customs Act 1901 (section 269F) pertains to the granting of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (section 269P). A TCO application can be submitted by a person seeking to reduce the customs duty on specific goods (section 269C). This process is subject to certain criteria, primarily that no substitutable goods are produced in Australia at the time of the application (section 269D, 269E, 269B). Once the CEO is satisfied that the application meets these criteria, a written order is made (section 269P(3)). In this instance, the CEO made TCO No. 1042990 on 13 December 2010, applying to certain planter bags (item 50 of Schedule 4 to the Tariff), reducing their duty rate from 5% to free.
The Customs Act imposes specific obligations on both the CEO and applicants. The CEO must evaluate the application against the core criteria and determine whether to issue a TCO (section 269C, 269P). Upon receiving a valid application, the CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties (section 269K(1)). In this case, no submissions were received. The CEO must ensure that the rights of persons other than the Commonwealth are not adversely affected by the TCO (section 269S(1)). Additionally, the TCO does not impose any new liabilities on any person.
The Act delineates consequences for non-compliance with its provisions. However, the Explanatory Statement does not explicitly mention offences, penalties, or consequences for breaching the terms of a TCO. It is implicit that the CEO’s decision-making process is guided by the statutory criteria and that failure to adhere to these could result in legal scrutiny or challenge. Given the nature of the Act, breaches could potentially lead to administrative reviews or legal proceedings, though the specific penalties are not detailed within the provided text.