EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1108413
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.
Supertex Industries applied for a TCO in respect of certain bath mats on 08 March 2011.
Instrument
TCO No 1108413 was made on 06 June 2011. It declares that those certain bath mats 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. 1108413 is taken to have come into force on 08 March 2011.
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, provides a framework for the administration of customs and excise in Australia. Part XVA of this Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which lower the rate of customs duty on specified goods. The Tariff Concession Instrument No. 1108413, issued in 2011, exemplifies this mechanism by granting a duty-free status to certain bath mats, as per the application by Supertex Industries. The policy objective behind this legislation is to support Australian industries by reducing the duty on goods that are not produced domestically, thereby making these goods more competitive. The instrument was introduced following a process that included a public invitation for submissions, none of which were received, indicating broad acceptance or lack of opposition to the tariff concession for these particular goods.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a framework for Tariff Concession Orders (TCOs) which the Chief Executive Officer of Customs (CEO) can issue. These orders apply to specific goods for which a lower rate of customs duty is mandated. An application for a TCO can be made by any person, provided the goods in question are not explicitly excluded under section 269SJ of the Act. The CEO is mandated to assess applications against core criteria stipulated in section 269C, which require that no substitutable goods were produced in Australia at the time of application. If these criteria are met, the CEO must issue a written TCO, as outlined in section 269P(3), specifying the applicable tariff item from Schedule 4 to the Customs Tariff Act 1995. This process was followed by Supertex Industries for their application concerning certain bath mats, leading to TCO No. 1108413, effective from 08 March 2011, which lowered the duty on these goods from 5% to free. The application of the TCO does not retroactively affect the rights or liabilities of any person other than the Commonwealth and provides a benefit to importers who can apply for duty refunds under the Customs Act Regulations.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1108413 are sections 269C, 269P(3), and 269SJ of the Customs Act 1901. Section 269C establishes the core criteria for determining whether an application for a Tariff Concession Order (TCO) meets the necessary requirements. Specifically, it stipulates that no substitutable goods must be produced in Australia in the ordinary course of business on the day the application was lodged. Section 269P(3) mandates that if these criteria are met, the Chief Executive Officer (CEO) of Customs must issue a written order, thereby granting the tariff concession. Section 269SJ, meanwhile, lists goods that are ineligible for a TCO, thereby delineating the scope of what types of goods can be considered for such concessions.
The obligations and requirements imposed by this Act on the parties it governs are primarily centred around the application process for a TCO. The applicant must ensure that their application is lodged on a day when no substitutable goods are being produced in Australia. The CEO, upon receiving a valid application, must publish a notice in the Gazette inviting any objections or submissions. If no objections are received, the CEO must proceed to make the TCO, as stipulated in section 269P(3). The Act also requires the CEO to consider the definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" as outlined in sections 269D, 269E, and 269F respectively. These definitions are crucial in determining whether the core criteria have been met.
The Act delineates certain offences and penalties for breaches, although specific penalties are not explicitly detailed within the provided text. Typically, breaches of the Customs Act 1901 may result in criminal or civil penalties, which could include fines or imprisonment, depending on the severity and nature of the offence. For instance, under the Customs Act, fraudulent misrepresentations or omissions can lead to significant penalties. While the specific penalties for breaches related to the issuance or misuse of a TCO are not mentioned in this text, they are likely to be aligned with the general penalties outlined elsewhere in the Act. It is also noteworthy that the TCO does not impose any liabilities on any person, thereby protecting individuals from any retrospective liabilities incurred before the registration date.