EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1125804
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.
Baden P Morris applied for a TCO in respect of certain feeding bottle spouts on 01 August 2011.
Instrument
TCO No 1125804 was made on 17 October 2011. It declares that those certain feeding bottle spouts 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. 1125804 is taken to have come into force on 01 August 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. 1125804, made under the Customs Act 1901, was enacted to address the need for reduced customs duties on specific goods that are not produced domestically. This instrument was introduced to provide tariff concessions, thereby reducing the financial burden on importers and facilitating access to essential goods that are otherwise not manufactured in Australia. The enacting body is the Chief Executive Officer of Customs, who is mandated to make such decisions based on the criteria outlined in the Act. The policy objective is to ensure that the application of tariff concessions supports economic efficiency and consumer access to goods by avoiding unnecessary tariffs on items that could be sourced domestically.
The Customs Act 1901 allows for the creation of Tariff Concession Orders (TCOs) to provide relief on customs duties for certain goods that meet specific conditions, such as the absence of substitutable goods produced in Australia. The instrument in question, TCO No. 1125804, was made on 17 October 2011, following an application by Baden P Morris for certain feeding bottle spouts. The CEO was satisfied that no substitutable goods were produced in Australia, leading to a declaration that these goods are subject to a zero rate of duty, rather than the general 5% duty. This change is intended to benefit importers by potentially allowing them to claim refunds for duties paid on these goods since the effective date of the TCO.
Scope and Application
The Tariff Concession Instrument No. 1125804, made under section 269F of the Customs Act 1901, applies to individuals or entities seeking to import specific goods, namely certain feeding bottle spouts, for which a Tariff Concession Order (TCO) has been applied and approved by the Chief Executive Officer of Customs. The legislation allows for the application of a lower rate of customs duty on goods that are subject to a TCO, provided the core criteria outlined in section 269C of the Act are met, specifically that no substitutable goods are produced in Australia at the time of application. The instrument operates on a Commonwealth level and its application is national in scope, impacting all entities involved in the importation of the specified goods within Australia. There are exclusions under section 269SJ of the Act, which lists goods that cannot be subject to a TCO, although this particular instrument does not specify any additional exclusions. The application of the TCO is further defined and potentially expanded by subordinate instruments, as authorised by the Act. The instrument's commencement date is aligned with the date of the application, 1 August 2011, ensuring that the rights of importers are protected and that they can seek refunds for duties paid on the goods since the effective date of the TCO.
Key Provisions
Section 269F of the Customs Act 1901 allows any person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) regarding specific goods. If the CEO determines that the application pertains to goods not listed in section 269SJ, which are ineligible for TCOs, they must assess whether the application meets the core criteria. A TCO application meets these criteria if, on the date of application, no substitutable goods were being produced in Australia in the ordinary course of business (section 269C). For these purposes, "goods produced in Australia," "ordinary course of business," and "substitutable goods" are defined by sections 269D, 269E, and 269F respectively.
The obligations imposed by the Customs Act 1901 on the CEO include accepting valid TCO applications and publishing a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted (subsection 269K(1)). The CEO must then consider these submissions in making their decision. In the case of Tariff Concession Order No. 1125804, which was made on 17 October 2011 for certain feeding bottle spouts, the CEO was satisfied that no substitutable goods were produced in Australia, leading to the issuance of the TCO. This order declares that the specified feeding bottle spouts are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, resulting in a duty rate of free, down from the general rate of 5%.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations could result in various civil or criminal consequences. However, the explanatory statement does not specify any particular offences, penalties, or consequences for breach of the Act in this context. The Act provides a framework for the CEO to make informed decisions regarding TCO applications, and the process is designed to ensure that the interests of all parties are considered. The rights of importers are beneficially affected by such orders, and they can apply for a refund of duty on goods imported since the date the TCO came into force, without any liabilities imposed on them.