EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1112365
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.
Decor applied for a TCO in respect of certain cooler bags on 12 April 2011.
Instrument
TCO No 1112365 was made on 11 July 2011. It declares that those certain cooler 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. 1112365 is taken to have come into force on 12 April 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 Tariff Concession Instrument No. 1112365, enacted in 2011, is a measure under the Customs Act 1901 designed to address the need for tariff concessions for specific goods, in this case certain cooler bags. The Customs Act 1901, enacted by the Australian Parliament, establishes a framework for the administration of customs duties and includes provisions for tariff concession orders (TCOs) that can be applied for by interested parties. The primary policy objective is to provide relief to importers by reducing or eliminating customs duty on certain goods where no substitutable goods are produced domestically. This instrument was introduced to ensure that the application process for tariff concessions is transparent and allows for public input before the concession is granted. The instrument effectively reduces the duty on the specified cooler bags from the general rate of 5% to free, effective from the date the application was lodged, 12 April 2011, thereby benefiting importers of these goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the process through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This legislation allows for the application of a lower rate of customs duty on goods specified in a TCO. The Act applies to any person who may apply to the CEO for a TCO concerning goods that are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO's decision to grant a TCO hinges on whether the application meets the core criteria outlined in sections 269C, 269D, and 269E of the Act, particularly if no substitutable goods are produced in Australia in the ordinary course of business. The application and subsequent concession are subject to the provisions of Schedule 4 to the Customs Tariff Act 1995. The geographic reach of this Act is national, affecting all entities and persons involved in the importation of goods within Australia. The application process includes public consultation as mandated by section 269K(1) of the Act, although in this instance, no submissions were received against the proposed TCO. The TCO applies retroactively from the date the application was lodged, benefiting importers by potentially allowing them to claim refunds for duties paid prior to the TCO's effective date.
Key Provisions
The key provisions of Tariff Concession Instrument No. 1112365 under the Customs Act 1901 (the Act) relate to the tariff concession orders (TCO) which are established to provide lower rates of customs duty on certain goods. Specifically, section 269F of the Act allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act as those that cannot be subject to a TCO. Section 269C further stipulates that an application meets the core criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The CEO must then make a written order (a TCO) if satisfied that the application meets the core criteria, as outlined in section 269P(3) of the Act.
The Act imposes several obligations on the parties involved. The CEO must decide whether the TCO application meets the core criteria by assessing if no substitutable goods were produced in Australia on the day the application was lodged. Additionally, under subsection 269K(1) of the Act, the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to lodge a submission. In the case of TCO No. 1112365, the CEO did not receive any submissions in response to this invitation.
Should there be any breach of the provisions set out in the Customs Act 1901, various civil and criminal consequences may apply. However, the specific penalties are not detailed in the explanatory statement. The Act does not outline any specific offences or penalties for non-compliance with the TCO provisions, but breaches of the Customs Act generally may lead to significant legal consequences. The instrument itself states that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration so as to disadvantage that person or impose liabilities on a person in respect of anything done or omitted to be done before the date of registration.