EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1130845
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.
ASICS Oceania Pty Ltd applied for a TCO in respect of certain hockey shoes on 09 September 2011.
Instrument
TCO No 1130845 was made on 05 December 2011. It declares that those certain hockey shoes 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. 1130845 is taken to have come into force on 09 September 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, established a framework for managing imports and exports, including the imposition of customs duties on imported goods. The Act includes provisions for Tariff Concession Orders (TCOs), which allow for reduced customs duty rates on certain goods, provided they meet specific criteria. The introduction of TCOs aimed to address economic and trade policy objectives by potentially lowering costs for businesses that import goods that are not produced domestically, thereby supporting competitive markets and consumer affordability. ASICS Oceania Pty Ltd applied for a TCO for certain hockey shoes, and the Chief Executive Officer of Customs determined that no substitutable goods were produced in Australia, leading to the concession of a lower duty rate of free, as opposed to the general rate of 5%. The TCO came into effect on the date the application was lodged, 09 September 2011, and no objections were raised during the consultation period.
Scope and Application
The Tariff Concession Instrument No. 1130845 applies to goods specified in the application, which in this instance are certain hockey shoes. The Act, being the Customs Act 1901, is the legislative framework under which the Tariff Concession Orders (TCOs) are made by the Chief Executive Officer of Customs (CEO). The Act applies to entities such as ASICS Oceania Pty Ltd, which submitted an application for the tariff concession, and any other entities that may apply for similar concessions in the future. The scope of the Act is limited to the conduct and transactions involving the importation of goods, specifically those that are subject to customs duty. The geographic reach of this legislation is national, as it applies to all customs duties and tariff concessions throughout Australia. The Act excludes certain goods from being subject to a TCO, as specified in section 269SJ of the Customs Act 1901. Furthermore, the application process for a TCO is governed by the core criteria outlined in sections 269C, 269B, 269D, and 269E of the Act, ensuring that substitutable goods are not produced in Australia in the ordinary course of business. The TCO is effective from the date the application was lodged, as per subsection 269S(1) of the Act, and does not impose any liabilities on any person, including the Commonwealth.
Key Provisions
The primary operative sections of this legislation, specifically under Part XVA of the Customs Act 1901, revolve around Tariff Concession Orders (TCOs) and their application process. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those ineligible for TCOs. The CEO must then determine if the application meets the core criteria set out in section 269C, which requires that no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations and requirements on the parties involved in the TCO process. For example, under section 269K(1), the CEO is required to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission with the CEO. Additionally, section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written TCO. The CEO must also ensure that 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 in respect of anything done or omitted to be done before the date of registration.
In terms of offences, penalties, or consequences for breach, the Act does not explicitly detail penalties for failing to comply with the requirements of a TCO. However, the legal framework under which these orders operate implies that non-compliance with the Customs Act 1901 could result in various civil or criminal consequences. Typically, breaches of the Customs Act could lead to fines or imprisonment, depending on the severity of the breach. For instance, under section 240 of the Customs Act, a person who contravenes any provision of the Act may be guilty of an offence and subject to a fine or imprisonment. Although specific penalties are not outlined for TCOs, the general enforcement mechanisms of the Act apply.
In conclusion, the Tariff Concession Instrument No. 1130845 establishes a process through which certain goods, in this case hockey shoes, can receive a lower rate of customs duty. The operative sections define the application process and core criteria for TCOs, while the obligations and requirements ensure transparency and compliance. Although the specific penalties for breach are not detailed, the overarching Customs Act provides a framework for enforcement, which includes potential fines or imprisonment for non-compliance.