EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1117372
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.
The Reject Shop Ltd applied for a TCO in respect of certain lights and/or light sets on 01 June 2011.
Instrument
TCO No 1117372 was made on 15 August 2011. It declares that those certain lights and/or light sets 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. 1117372 is taken to have come into force on 01 June 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 Commonwealth Parliament, provides a framework for the administration of customs duties and the regulation of imports and exports in Australia. Specifically, Part XVA of the Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders can reduce the customs duty on certain goods if specific criteria are met, such as when no substitutable goods are produced in Australia. This mechanism was introduced to address the problem of ensuring fair trade practices by preventing the imposition of customs duties on goods for which there are no domestic alternatives. The policy objective is to facilitate the importation of goods that are not produced locally, thereby promoting economic efficiency and consumer choice.
Tariff Concession Instrument No. 1117372, made under the Customs Act 1901, was introduced on 15 August 2011. It was enacted in response to an application by The Reject Shop Ltd for a TCO concerning certain lights and/or light sets. The Chief Executive Officer of Customs was satisfied that no substitutable goods were produced in Australia, leading to the issuance of the TCO, which reduced the duty rate from 5% to free. This legislative instrument ensures that the rights of importers are positively affected, with potential for duty refunds on imports made since the TCO's effective date of 1 June 2011, while imposing no new liabilities on any person.
Scope and Application
The Customs Act 1901, under Part XVA, establishes a scheme for Tariff Concession Orders (TCOs) which can be applied for by any person seeking a lower rate of customs duty for certain goods. These orders are made by the Chief Executive Officer of Customs (CEO), who must assess whether the application meets core criteria, including the absence of substitutable goods produced in Australia. If the criteria are met, the CEO issues a TCO specifying the reduced duty rate for the goods in question. This legislation applies to any entity or individual seeking tariff concessions on specific goods, ensuring they are not already being produced in Australia for similar uses. Geographically, the application of this Act is national, as it pertains to customs duties across Australia. The Act does not apply to goods specified in section 269SJ, which lists items ineligible for tariff concessions. The application of the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which outlines the specific duty rates and schedules affected by TCOs.
Key Provisions
The main operative sections of the Customs Act 1901, particularly in relation to Tariff Concession Orders (TCOs), are sections 269C, 269B, 269D, 269E, 269F, 269P, 269S, 269SJ, and 269K. Section 269F allows for an application to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. Section 269C specifies that a TCO application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Definitions and further criteria are provided in sections 269B, 269D, and 269E. If the CEO is satisfied that the application meets the core criteria, they must make a written order (a TCO) as outlined in section 269P(3). Section 269SJ sets out goods that cannot be subject to a TCO. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions if the application is accepted as valid.
The Customs Act imposes several obligations and requirements on parties and entities it governs. For applicants, such as The Reject Shop Ltd, the primary obligation is to ensure that their application for a TCO meets the core criteria as outlined in section 269C. This involves demonstrating that no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The CEO, on receiving a valid application, must make a decision based on these criteria and, if satisfied, issue a written TCO. The CEO is also required to publish a notice in the Gazette inviting submissions from any interested parties, although in this case, no submissions were received. The CEO's role includes ensuring that the rights of importers are beneficially affected and that no liabilities are imposed on persons other than the Commonwealth.
In terms of potential offences, penalties, or civil/criminal consequences, the Customs Act does not explicitly state penalties for failing to meet the requirements or for breaches of a TCO. However, the general legal framework under which the Customs Act operates includes provisions for penalties for non-compliance with customs laws. Penalties can include fines and, in more severe cases, imprisonment. The specifics of these penalties would be governed by other sections of the Customs Act or related legislation, such as the Crimes Act 1914, but these are not detailed in the explanatory statement provided.
In summary, the Act and the TCO in question focus on establishing a process for tariff concessions on certain imported goods, ensuring that no substitutable goods are produced in Australia, and facilitating the benefits to importers without imposing new liabilities on non-Commonwealth persons. The legislative framework provides a clear path for applications and decision-making by the CEO, with an emphasis on transparency and minimal disruption to existing rights and liabilities.