EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1050326
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.
Kmart Australia Ltd applied for a TCO in respect of certain ball rebound nets on 15 November 2010.
Instrument
TCO No 1050326 was made on 07 February 2011. It declares that those certain ball rebound nets 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. 1050326 is taken to have come into force on 15 November 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. 1050326, enacted under the Customs Act 1901, was introduced to address the specific issue of tariff concessions for certain goods. The Customs Act 1901 provides a framework for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs), which apply lower rates of customs duty to goods specified in the order. In this instance, Kmart Australia Ltd applied for a TCO for certain ball rebound nets, and the instrument was made on 7 February 2011 after the CEO was satisfied that no substitutable goods were produced in Australia. The policy objective of this measure was to benefit importers by reducing the duty rate from 5% to free, without imposing any liabilities on any person. The Tariff Concession Instrument was published in the Gazette, and no submissions were received in response to the invitation for objections. The TCO came into force on 15 November 2010, the date on which the application was lodged, and it does not affect the rights of any person as at the date of registration.
Scope and Application
The Customs Act 1901, as amended through the Tariff Concession Instrument No. 1050326, applies to entities seeking tariff concessions on imported goods, specifically in this case, Kmart Australia Ltd for their application regarding ball rebound nets. The application of this legislation is primarily concerned with the conditions under which a Tariff Concession Order (TCO) can be granted by the Chief Executive Officer of Customs, ensuring that the goods in question do not have substitutable alternatives produced within Australia. This instrument extends to the entire Commonwealth of Australia and is administered under the purview of the Customs Act 1901. Notably, the Act excludes certain goods from eligibility for a TCO, as outlined in section 269SJ, and imposes a requirement that no substitutable goods are produced in Australia at the time of application. The tariff concession granted under this instrument provides a significant benefit by reducing the duty on the specified goods from the general rate of 5% to free, effective from the date of the application, 15 November 2010.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1050326 pertain to the application and granting of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided they do not fall under the exceptions specified in section 269SJ. Section 269C outlines the core criteria for a TCO, which include the absence of substitutable goods produced in Australia on the day the application is lodged (Section 269P(3)). If these criteria are met, the CEO is required to issue a written order (Section 269P(3)), declaring the goods to which the TCO applies (Section 269P(3)).
Entities such as Kmart Australia Ltd, who apply for a TCO, must ensure that their applications meet these core criteria, and the CEO must publish a notice in the Gazette to invite submissions from any interested parties (Section 269K(1)). The CEO is also required to make a decision on the application without delay and, if satisfied, issue the TCO (Section 269P(3)). In this case, the CEO made TCO No. 1050326 on 7 February 2011, declaring that certain ball rebound nets are subject to a TCO, as no substitutable goods were produced in Australia on the date of the application. The TCO effectively reduced the customs duty rate for these nets from 5% to free (Schedule 4, item 50, Customs Tariff Act 1995).
The obligations imposed by the Act on the parties involved are primarily procedural and informational. The CEO must process TCO applications in accordance with the criteria set out in the Act, including the publication of notices in the Gazette and the consideration of any submissions received. Importers and other entities applying for a TCO must ensure that their applications are complete and meet the specified criteria. Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken before the TCO registration date.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breach of the Act's provisions related to TCOs. However, the Act ensures that the rights of individuals are not adversely affected by the issuance of a TCO. Under paragraph 126(1)(r) of the Regulations, importers can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, which provides a remedy for any potential overpayment of duty. The TCO itself does not impose any liabilities on any person, ensuring that its implementation does not result in any adverse consequences for those affected by it.