EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139262
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.
Kathmandu Pty Ltd applied for a TCO in respect of certain bat and ball sets on 25 November 2011.
Instrument
TCO No 1139262 was made on 13 February 2012. It declares that those certain bat and ball 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. 1139262 is taken to have come into force on 25 November 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 by the Commonwealth Parliament and serves to regulate the importation and exportation of goods in Australia, including the imposition of customs duties. The Act provides for the creation of Tariff Concession Orders (TCOs), which can lower the customs duty on specified goods. This legislation was introduced to address the problem of ensuring that certain goods that cannot be produced domestically are subject to a lower rate of customs duty, thereby encouraging trade and economic efficiency. Tariff Concession Instrument No. 1139262, made on 13 February 2012, exemplifies this process by granting a tariff concession for certain bat and ball sets, reducing the general duty rate from 5% to free, provided no substitutable goods are produced in Australia. The policy objective is to facilitate trade by making essential imported goods more affordable, without disadvantaging existing rights or imposing new liabilities on individuals.
Scope and Application
The Customs Act 1901, specifically Part XVA, outlines the framework under which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods into Australia and aims to provide tariff concessions on specified goods. The scope of the Act extends to the entire Commonwealth of Australia, ensuring that the tariff concessions apply uniformly across all states and territories. The Act excludes certain goods from being subject to TCOs, as specified in section 269SJ, and it includes provisions that determine when a TCO application meets the core criteria, notably through sections 269C and 269D. The Act allows for the application of these concessions through subordinate instruments, ensuring flexibility and precision in its implementation. The Tariff Concession Order No. 1139262, for instance, was issued to Kathmandu Pty Ltd for certain bat and ball sets, reducing the duty on these goods from 5% to free, effective from the date of the application, 25 November 2011.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1139262 under the Customs Act 1901 (section 269P(3)) involve the process by which the Chief Executive Officer of Customs (CEO) grants a Tariff Concession Order (TCO). When an application for a TCO is made under section 269F, the CEO must assess if it meets the core criteria, which are outlined in sections 269C, 269D, 269E, and 269SJ. Specifically, section 269C stipulates that the application is valid if, at the time it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If these criteria are met, the CEO must make a TCO as stated in section 269P(3). This TCO, in this instance, relates to certain bat and ball sets, specifying that they are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, thus applying a duty rate of free, down from the general rate of 5%.
The obligations imposed by the Act on parties governed by this legislation are primarily on the CEO of Customs and the applicant. The CEO must ensure that the application complies with the core criteria (section 269C) and that the goods specified do not have substitutable equivalents produced in Australia (section 269D). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties once a TCO application is accepted (subsection 269K(1)). The applicant must provide sufficient evidence to satisfy the CEO that the goods in question are eligible for a TCO under the conditions outlined in the Act.
In terms of consequences for non-compliance, the Act does not explicitly state offences, penalties, or specific civil or criminal consequences for breach within the provided text. However, it is implied that failure to meet the criteria for a TCO or improper application of the concession could result in legal repercussions under the broader Customs Act 1901, which may include fines or other penalties as prescribed by the relevant authorities. The TCO itself is designed to ensure that it does not disadvantage any person or impose liabilities for actions taken before its registration, thereby protecting the rights of importers and others involved.