EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1139265
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 sheets on 25 November 2011.
Instrument
TCO No 1139265 was made on 13 February 2012. It declares that those certain sheets 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. 1139265 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 Parliament of Australia to provide a framework for the administration of customs duties and related matters. One of the mechanisms within this Act is the provision for Tariff Concession Orders (TCOs), which allow for the reduction or elimination of customs duty on certain goods under specific conditions. The 2012 Tariff Concession Instrument No. 1139265 addresses a particular need by granting tariff concessions to Kathmandu Pty Ltd for certain sheets, effectively reducing the duty from 5% to free. The policy objective behind such concessions is to support Australian industries by preventing unfair competition from domestically produced goods, thereby fostering economic growth and protecting local businesses. The instrument was introduced to ensure that no substitutable goods were being produced in Australia, thus justifying the tariff reduction.
Scope and Application
The Tariff Concession Instrument No. 1139265 under the Customs Act 1901 applies to the goods specified in the instrument, namely certain sheets, for which Kathmandu Pty Ltd applied on 25 November 2011. The application was processed by the Chief Executive Officer of Customs, who determined that the goods qualified for a Tariff Concession Order (TCO) as no substitutable goods were produced in Australia on the date the application was lodged. The TCO exempts these goods from the general customs duty rate, reducing it from 5% to free, thereby benefiting the importers of these sheets. The instrument’s application is confined to the goods explicitly mentioned and does not extend to any other goods or industries unless similarly qualified under the provisions of the Customs Act 1901. The TCO does not affect any pre-existing rights or impose any new liabilities on persons other than the Commonwealth. Furthermore, the TCO’s jurisdiction is national, with its provisions extending across Australia as per the federal nature of the Customs Act 1901.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1139265 (F2012L00801) under the Customs Act 1901 (section 269F) involve the process of applying for and making a Tariff Concession Order (TCO). Specifically, section 269F allows for an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO concerning goods. If the CEO determines that the application is not for goods listed in section 269SJ, which are ineligible for a TCO, they must then assess whether the application meets the core criteria outlined in section 269C. This involves checking that, on the day the application was made, no substitutable goods were being produced in Australia in the ordinary course of business.
The obligations imposed on the parties by the Act include ensuring that any application for a TCO is made in accordance with the requirements set out in section 269F. The CEO is mandated under section 269K(1) to publish a notice in the Gazette inviting submissions from any person who may have reasons to oppose the TCO. This is a procedural requirement to ensure transparency and provide an opportunity for interested parties to be heard. Additionally, once a TCO is made, as per section 269P(3), it must be in writing and specify the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
Failure to comply with the requirements set out in the Customs Act 1901 can lead to various consequences. While the explanatory statement does not explicitly detail the penalties for non-compliance, it is reasonable to infer that breaches of the Act, including improper applications or misrepresentations, could result in civil or criminal penalties. Such penalties could include fines or other sanctions as provided under the general legal framework governing the administration of customs duties in Australia. The specific maximum penalties would depend on the nature and severity of the breach, as outlined in other relevant sections of the Customs Act and associated regulations.