EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1131500
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.
Hunt Leather Pty Ltd applied for a TCO in respect of certain bags on 14 September 2011.
Instrument
TCO No 1131500 was made on 12 December 2011. It declares that those certain 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. 1131500 is taken to have come into force on 14 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, establishes a framework for the administration of customs and excise, including the process for making Tariff Concession Orders (TCOs) through which reduced rates of customs duty may be applied to certain goods. The Act was introduced to address the need for a structured and efficient method to provide tariff relief on specific goods, ensuring that Australian businesses can compete effectively in the global market while maintaining the government's revenue from customs duties. This Act enables the Chief Executive Officer of Customs to make TCOs if certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective behind this mechanism is to foster economic growth and support industry sectors by making imported goods more affordable, thus encouraging consumption and investment. The explanatory statement details how Hunt Leather Pty Ltd successfully applied for a TCO for certain bags, leading to a tariff concession that reduces the duty from 5% to free, effective from the date of the application.
Scope and Application
The Tariff Concession Instrument No. 1131500, made under the Customs Act 1901, applies to Hunt Leather Pty Ltd and their application for tariff concessions on certain bags, specifically those that meet the criteria set out in the Act. The instrument was enacted to provide tariff concessions on these particular goods, effectively reducing the customs duty from the general rate of 5% to free, as no substitutable goods were produced in Australia at the time of the application. This instrument reflects the process of applying for and receiving tariff concessions as outlined in the Act, where the Chief Executive Officer of Customs (CEO) must decide if the application meets the core criteria, which in this case, it did. The geographic reach of this Act is national, as it pertains to the importation of goods into Australia and the customs duties that apply. Any person or entity importing goods into Australia that qualify under a Tariff Concession Order may benefit from this Act.
The application and scope of this Act extend to the entire Commonwealth of Australia, as it involves the customs duties and concessions on goods imported into the country. However, there are exclusions as per section 269SJ of the Act, which lists goods that cannot be subject to a Tariff Concession Order. The instrument does not impose any new liabilities on individuals or entities and does not disadvantage anyone who had rights as of the date of registration. It is important to note that the Act allows for the extension or restriction of application through subordinate instruments, which could further define the scope and application of the legislation.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1131500 under the Customs Act 1901 (sections 269C, 269P, 269SJ, and 269K) establish the conditions and processes for granting a Tariff Concession Order (TCO). Specifically, section 269C requires that a TCO application meets the core criteria if no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the Chief Executive Officer of Customs (CEO) is satisfied with the application, a written order must be made, declaring the goods subject to a lower customs duty rate. Section 269SJ lists goods that are not eligible for a TCO, while section 269K requires the CEO to publish a notice in the Gazette inviting submissions regarding the TCO application.
Under this legislation, the CEO is obligated to assess whether the application for a TCO meets the core criteria as specified in section 269C. This involves verifying that no substitutable goods were produced in Australia at the time of the application. If the application is deemed valid, the CEO must make a written order as per section 269P, effectively granting the concession. Additionally, section 269K imposes a requirement on the CEO to publish a notice in the Gazette, soliciting any objections to the TCO application. The CEO must consider all submissions before making a final decision on the application.
Failure to comply with the provisions of the Customs Act 1901 in relation to TCOs may lead to various civil and criminal consequences. Section 269P(3) highlights that if the CEO makes a TCO without meeting the statutory requirements, it may be subject to judicial review. Any person aggrieved by the CEO's decision can seek relief in the Federal Court. There are no specific penalties outlined for breaches of the TCO provisions in the explanatory statement, but general provisions under the Customs Act 1901 may apply, including fines and imprisonment for serious breaches related to customs duties.
In summary, the Tariff Concession Instrument No. 1131500 provides a framework for the CEO to assess and grant tariff concessions on specific goods, provided they meet the outlined criteria. The CEO is required to publish notices and consider submissions, ensuring transparency and fairness in the process. Any failure to adhere to these provisions may result in legal challenges and potential penalties under the broader Customs Act 1901.