EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139263
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 cases on 25 November 2011.
Instrument
TCO No 1139263 was made on 13 February 2012. It declares that those certain cases 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. 1139263 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 Tariff Concession Instrument No. 1139263 was enacted in 2012 under the Customs Act 1901, addressing the issue of providing tariff concessions for certain goods imported into Australia. This legislation facilitates the reduction or elimination of customs duties on specific goods, as determined by the Chief Executive Officer of Customs (CEO) upon application and meeting certain criteria. The Customs Act 1901, specifically Part XVA, empowers the CEO to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty on goods specified in the order. Kathmandu Pty Ltd successfully applied for a TCO for certain cases, leading to Instrument No. 1139263, which came into force on 25 November 2011, the date of the application. The policy objective is to promote trade by reducing the cost of imported goods, thereby benefiting importers who can apply for duty refunds on goods imported since the TCO's effective date. The instrument does not disadvantage any person or impose liabilities on anyone except the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1139263, made under the Customs Act 1901, applies specifically to goods in respect of which Kathmandu Pty Ltd has applied for a Tariff Concession Order (TCO). This legislation allows for a reduced rate of customs duty on certain goods, in this instance, specific cases, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Act applies to the CEO of Customs and any entities or individuals affected by the customs duty rates on the specified goods. Geographically, the Act applies across the Commonwealth of Australia, as it is a federal law. The Act does not explicitly state exclusions, but it does specify that the TCO does not disadvantage any person or impose liabilities on anyone for actions taken before the TCO's effective date. The Act's application may be extended or modified through subordinate instruments, such as regulations, which can provide further detail on the processes and conditions for TCO applications.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Order (TCO) No. 1139263, are outlined in sections 269C, 269F, and 269P of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO, while section 269C specifies the criteria that must be met for such an application to be valid, primarily that no substitutable goods are produced in Australia at the time of the application. If the CEO is satisfied that the application meets these criteria, section 269P mandates that the CEO must issue a written order, i.e., a TCO, that specifies the lower rate of customs duty applicable to the goods in question. In this instance, TCO No. 1139263 was issued on 13 February 2012, declaring that certain cases are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, with a duty rate of free instead of the general rate of 5%.
The obligations and requirements imposed by this Act on the parties or entities it governs are primarily centred around the application and approval process for TCOs. For applicants, the primary obligation is to ensure that their application for a TCO meets the core criteria set out in section 269C, particularly that no substitutable goods are being produced in Australia at the time of application. The CEO, on the other hand, is required to review the application, determine whether it meets the core criteria, and if satisfied, issue a written TCO. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, although in this case, no submissions were received.
In terms of penalties and consequences for breaches of the Act, section 269SJ specifies certain goods that cannot be the subject of a TCO, indicating that applications for these goods will be invalid. However, the Act does not explicitly detail other penalties for non-compliance or breaches related to TCOs. It is important to note that the TCO does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person in respect of actions taken prior to the TCO's effective date. Consequently, the rights of importers are beneficially affected, allowing them 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.