EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134527
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.
Adeal Pty Ltd applied for a TCO in respect of certain camera straps on 13 October 2011.
Instrument
TCO No 1134527 was made on 04 January 2012. It declares that those certain camera straps 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. 1134527 is taken to have come into force on 13 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 Customs Act 1901 was enacted to regulate the importation and exportation of goods in Australia, including the imposition of customs duties. The Act facilitates the granting of tariff concession orders (TCOs) to provide relief from customs duties on certain goods. The problem or gap this legislation addresses is the potential economic disadvantage faced by businesses importing specific goods that are not produced domestically. By introducing the Tariff Concession Instrument No. 1134527, the Customs Act aims to offer relief to businesses importing certain camera straps, ensuring they are not subjected to customs duties, thereby promoting fair competition and economic efficiency. The instrument was enacted by the Chief Executive Officer of Customs, acting under the authority conferred by the Customs Act, with the policy objective of reducing the financial burden on importers and encouraging the availability of specific goods within the Australian market.
Scope and Application
The Customs Act 1901, through its Part XVA, governs the process by which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. These orders allow for a lower rate of customs duty on specified goods, provided certain criteria are met. Specifically, the application for a TCO must not concern goods listed in section 269SJ, and the CEO must determine that no substitutable goods are produced in Australia in the ordinary course of business at the time of application. The Act provides definitions for terms such as 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', ensuring clarity in the application process. If the CEO finds that the application meets these criteria, they are required to issue a written TCO specifying the applicable tariff item from the Customs Tariff Act 1995. The instrument in question, TCO No. 1134527, was made on 04 January 2012, and it applies to certain camera straps, reducing their duty from 5% to free under item 50 of Schedule 4 of the Tariff. The CEO published a notice in the Gazette inviting submissions against the TCO but received none, thus proceeding with the order. The TCO applies retroactively from the date of the application, 13 October 2011, without affecting existing rights or imposing new liabilities on individuals.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1134527 under the Customs Act 1901 (section 269P(3)) involve the creation of a Tariff Concession Order (TCO) by the Chief Executive Officer of Customs (CEO). This instrument declares that certain camera straps, specified in the application by Adeal Pty Ltd, are to be treated as goods subject to a tariff concession. As per the application made on 13 October 2011, the CEO, being satisfied that no substitutable goods were produced in Australia on the date of the application, issued the TCO on 4 January 2012. This order specifies that these camera straps are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, resulting in a tariff rate of free, down from the general rate of 5%.
The obligations and requirements imposed by this Act on the parties involved include a structured application process for tariff concessions. As per section 269F, an applicant must submit an application to the CEO, ensuring it does not pertain to goods specified in section 269SJ, which are ineligible for TCOs. Section 269C mandates that the CEO must evaluate whether the application meets the core criteria, which involve confirming that no substitutable goods were produced in Australia at the time of application. Section 269K(1) requires the CEO to publish a notice in the Gazette, inviting any objections or submissions regarding the proposed TCO. In this instance, no submissions were received, facilitating the CEO’s decision to proceed with the TCO.
The Act also outlines specific consequences for breaches of its provisions. Although the explanatory statement does not explicitly detail penalties for non-compliance with TCOs, it is reasonable to infer that breaches could lead to legal repercussions under the broader Customs Act 1901. These may include fines, penalties, or other enforcement actions, which are typically determined by the severity of the breach and any associated harm caused. The statutory framework is designed to ensure compliance, protect the interests of both the government and the industry, and maintain the integrity of the tariff concession system.
In summary, Tariff Concession Instrument No. 1134527 under the Customs Act 1901 provides a clear process for applying and granting tariff concessions on specified goods, with a focus on ensuring that no substitutable goods are produced in Australia. It imposes obligations on applicants to submit valid applications and on the CEO to review these applications and publish notices inviting public submissions. While the explanatory statement does not detail specific penalties, breaches of the Act’s provisions could result in significant legal consequences.