EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1135313
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.
Waterwicket Pty Ltd applied for a TCO in respect of certain floatable cricket sets on 20 October 2011.
Instrument
TCO No 1135313 was made on 12 January 2012. It declares that those certain floatable cricket sets 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. 1135313 is taken to have come into force on 20 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 provide a comprehensive framework for the regulation of customs and excise in Australia. In 2012, Tariff Concession Instrument No. 1135313 was introduced under this Act to address the need for tariff concessions on specific imported goods. The instrument was developed to allow the Chief Executive Officer of Customs to grant lower customs duty rates on certain goods, provided that no substitutable goods were produced in Australia at the time of the application. The primary objective of this instrument is to facilitate trade by reducing the financial burden on importers of these specified goods, thereby promoting economic efficiency and fairness in the importation process. This initiative was established by the Australian government through the Parliament and aims to ensure that the application of tariff concessions aligns with broader economic and trade policy objectives.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework allowing the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that provide a lower rate of customs duty on certain goods. The application for such concessions is made by a person to the CEO, who assesses whether the application meets the core criteria stipulated in the Act. Specifically, a TCO application is deemed to meet these criteria if, on the date the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. The CEO must then make a written order if satisfied that the application meets these criteria, as was the case with Waterwicket Pty Ltd's application for certain floatable cricket sets, resulting in Tariff Concession Order No. 1135313. This instrument specifies that the goods in question are subject to a zero rate of duty instead of the general 5% duty rate. The order came into force on the date the application was lodged, 20 October 2011, and does not affect the rights of any person prior to its registration nor impose any liabilities on individuals or entities.
Key Provisions
The main operative sections of this legislation, particularly section 269F, enable an application to be made to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of certain goods. Section 269C then specifies that an application for a TCO meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. The term 'substitutable goods' is defined in section 269D, while 'ordinary course of business' is defined in section 269E. Once the CEO is satisfied that the application meets the core criteria, section 269P(3) requires the CEO to make a written TCO order, as demonstrated in the case of TCO No. 1135313 for floatable cricket sets. This particular TCO was made on 12 January 2012, and it declared that the certain floatable cricket sets were goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting a concessional rate of duty, which in this instance is free.
The obligations and requirements imposed by this Act primarily focus on the CEO of Customs. Upon receiving a valid TCO application, the CEO must determine whether the application meets the core criteria as outlined in section 269C. If the application is deemed to meet these criteria, the CEO is obligated to make a written TCO order, as mandated by section 269P(3). The CEO is also required to publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as per subsection 269K(1). Once a TCO is made, it is to be taken as having come into force on the day the application for the TCO was lodged, as stated in subsection 269S(1).
Breaching the conditions set out in this Act can lead to various civil and criminal consequences. However, the explanatory statement does not explicitly outline the specific offences, penalties, or consequences for breach. It does clarify, though, that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, in a way that would disadvantage that person or impose liabilities for actions taken prior to the registration date. Importers, however, will benefit from the rights conferred by the TCO, such as the ability to apply for a refund of duty on goods imported since the TCO's effective date, as per paragraph 126(1)(r) of the Regulations. This suggests that while there are formal obligations and requirements for the CEO, the Act is designed to protect the interests of parties other than the Commonwealth by ensuring no adverse effects from the TCO.