EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1045151
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.
Target Australia applied for a TCO in respect of certain toy tractors on 06 October 2010.
Instrument
TCO No 1045151 was made on 20 December 2010. It declares that those certain toy tractors 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. 1045151 is taken to have come into force on 06 October 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, establishes a framework for the regulation of imports and exports, including the imposition of customs duties. The Act was introduced to address the need for a structured approach to managing the flow of goods across Australian borders and to ensure the efficient collection of revenue through customs duties. Part XVA of the Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which provide lower rates of customs duty on certain goods. This mechanism aims to support Australian industries by reducing the cost of imported goods that have no local substitute, thereby promoting competition and potentially lowering consumer prices. In this context, Tariff Concession Instrument No. 1045151 was issued to provide a zero-duty rate for certain toy tractors, in response to an application from Target Australia, recognising the absence of substitutable goods produced in Australia. The instrument aims to facilitate the importation of these goods without imposing additional burdens or liabilities on parties involved.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This legislation applies to any person who seeks to import goods that are eligible for a lower rate of customs duty through a TCO. The scope of the Act encompasses the application process, criteria for eligibility, and the issuance of TCOs for goods that do not have substitutable goods produced in Australia in the ordinary course of business. The application must meet the core criteria outlined in sections 269C and 269SJ, ensuring that the goods are not prohibited from concession under the Act. The geographic reach of this legislation is national, applying across Australia as it is an Act of the Commonwealth. The Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable rates of duty. Notably, the Act does not disadvantage any person other than the Commonwealth and does not impose any liabilities on individuals for actions taken prior to the TCO's effective date.
Key Provisions
The primary operative sections of this legislation concern the process and requirements for the application and approval of a Tariff Concession Order (TCO) under Part XVA of the Customs Act 1901 (section 269C, 269F, 269P). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specified goods. If the CEO determines that the application is valid and meets the core criteria set out in section 269C, they are required to make a written order, which becomes the TCO. For the TCO to be effective, the CEO must be satisfied that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P respectively.
The obligations imposed by the Act primarily concern the CEO's responsibilities when processing a TCO application. Under section 269K(1), the CEO must publish a notice in the Gazette inviting any person to lodge a submission if they believe the TCO should not be made. If no submissions are received, the CEO must proceed with making the TCO. Additionally, section 269S(1) stipulates that a TCO is effective from the date the application was lodged. The Act also mandates that the TCO should not affect the rights of any person, except the Commonwealth, as at the date of registration, ensuring no person is disadvantaged or incurs liabilities due to actions taken before the TCO was registered.
The legislation outlines specific consequences for breaches of its provisions, although no offences are explicitly stated in the provided text. In the context of TCOs, failure to adhere to the criteria set out in section 269C could result in the CEO not issuing a TCO, thereby denying the applicant the tariff concession they sought. The text does not specify civil or criminal penalties for non-compliance, but it is implied that any deviation from the prescribed process could lead to the TCO application being rejected. The general rate of duty for the toy tractors, as per item 50 of Schedule 4 to the Tariff, is 5%, whereas the rate for goods subject to the TCO is free. This reduction in duty is contingent on compliance with the legislative requirements.