EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1133805
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.
FBA Imports Pty Ltd applied for a TCO in respect of certain shoe storage organisers on 06 October 2011.
Instrument
TCO No 1133805 was made on 04 January 2012. It declares that those certain shoe storage organisers 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. 1133805 is taken to have come into force on 06 October 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 Order No. 1133805 under the Customs Act 1901 was enacted in 2012 to provide a tariff concession for certain shoe storage organisers imported into Australia. This instrument addresses the problem of applying a lower rate of customs duty to goods that do not have substitutable Australian-made alternatives, thereby encouraging the import of these specific goods and potentially benefiting importers by reducing their duty liabilities. The instrument was made by the Chief Executive Officer of Customs in accordance with section 269F of the Customs Act 1901, following an application by FBA Imports Pty Ltd. The decision to grant the tariff concession was based on the core criteria outlined in section 269C of the Act, which requires that no substitutable goods were produced in Australia in the ordinary course of business at the time the application was lodged. The policy objective behind this measure is to ensure that Australian consumers and businesses have access to competitively priced goods where there are no local alternatives, while also facilitating the import process for the specified products.
Scope and Application
The Tariff Concession Instrument No. 1133805 under the Customs Act 1901 applies to FBA Imports Pty Ltd, specifically concerning certain shoe storage organisers. This legislation allows for a lower rate of customs duty for these goods, as stipulated by the instrument. The Act applies to any entity seeking tariff concessions for goods not produced in Australia, provided they meet the criteria set out in sections 269C, 269D, and 269E of the Act. The instrument was made on 4 January 2012, following an application submitted by FBA Imports Pty Ltd on 6 October 2011, and it applies to goods that are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument reduces the duty rate from the general 5% to free, effective from the date the application was lodged. The CEO of Customs is required to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in response to the notice for this instrument. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 1133805 under the Customs Act 1901 (section 269P(3)) involve the declaration of certain shoe storage organisers as goods eligible for a tariff concession order (TCO). This means that the application by FBA Imports Pty Ltd on 06 October 2011 was reviewed, and on 04 January 2012, the Chief Executive Officer of Customs (CEO) issued TCO No. 1133805, declaring that these organisers are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies. Consequently, the general duty rate of 5% is reduced to free for these goods, as long as the core criteria are met, specifically that no substitutable goods were produced in Australia on the date of the application.
Under this legislation, the obligations primarily rest on the CEO to ensure that the application for a TCO meets the core criteria as stipulated in sections 269C and 269B of the Customs Act. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who might oppose the TCO. If no submissions are received, as was the case with TCO No. 1133805, the CEO proceeds to make the TCO. Additionally, FBA Imports Pty Ltd, as the applicant, must ensure their application meets all specified criteria and provide any necessary information to support their case.
The Customs Act 1901 and associated regulations outline the potential consequences for non-compliance or breach of the provisions. If a TCO is issued based on incorrect or misleading information, it could lead to the revocation of the concession. Additionally, any person found to have acted in bad faith or provided false information in the application process could face civil or criminal penalties. The exact penalties would depend on the specific breach and could include fines or legal action. However, the explanatory statement does not detail specific maximum penalties for breaches related to TCOs, and further consultation of the full Act and associated regulations would be necessary for comprehensive penalty information.