EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1140102
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 backpacks on 01 December 2011.
Instrument
TCO No 1140102 was made on 13 February 2012. It declares that those certain backpacks 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. 1140102 is taken to have come into force on 01 December 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 facilitate international trade by regulating the import and export of goods through Australia. The Act was established to provide a comprehensive framework for the administration of customs and excise, including the imposition of customs duty on imported goods. One of the significant gaps addressed by the Act was the need for a structured process to grant tariff concessions on certain goods, thereby encouraging trade and investment. The Customs Act 1901 empowers the Chief Executive Officer of Customs to make Tariff Concession Orders, which reduce or eliminate customs duty on specified goods if certain criteria are met. This legislative instrument aims to ensure that the tariff concessions do not negatively impact the rights of existing stakeholders and promote fairness in the application process. The Parliament of Australia enacted this Act to streamline customs processes and support economic growth through targeted tariff reductions.
Scope and Application
The Customs Act 1901 applies to individuals, businesses, and entities involved in the import and export of goods into Australia, specifically those seeking tariff concessions. The Act governs the process through which Tariff Concession Orders (TCOs) can be applied for and granted, affecting the rate of customs duty applicable to certain goods. The geographic reach of the Act is national, with the CEO of Customs having the authority to make these orders under Part XVA of the Act. TCOs can be applied for by any person, provided the goods in question are not those specified in section 269SJ, which cannot be subject to a TCO. The application process involves meeting the core criteria, notably that no substitutable goods are produced in Australia at the time of application. The TCO's application is effective from the date the application is lodged, as per subsection 269S(1) of the Act. The TCO does not retroactively affect the rights of any person or impose liabilities for actions taken before its registration, ensuring that only future transactions are impacted. Subordinate instruments may further extend or restrict the application of this Act.
Key Provisions
The Customs Act 1901 establishes a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (CEO) to provide a lower rate of customs duty on certain goods. Specifically, section 269F allows a person to apply for a TCO, and if the CEO is satisfied that the application is not in respect of goods specified in section 269SJ, they must determine whether the application meets the core criteria as outlined in sections 269B, 269C, and 269D of the Act. If the application meets these criteria, the CEO must issue a written TCO declaring that the goods are subject to a prescribed rate of duty specified in the order (section 269P(3)). For instance, TCO No. 1140102, which was made in respect of certain backpacks on 13 February 2012, specifies that these goods are to be treated under item 50 of Schedule 4 to the Customs Tariff Act 1995, with a rate of duty reduced from the general 5% to free.
In terms of obligations, the Act imposes several key requirements on the parties involved. The CEO must ensure that the application is not in respect of goods specified in section 269SJ and that the application meets the core criteria. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)). The CEO must also decide whether to make the TCO based on the application's compliance with the criteria and any submissions received. Furthermore, TCOs do not affect the rights of any person as at the date of registration, and they do not impose any liabilities on any person.
There are no specific offences, penalties, or civil/criminal consequences mentioned for breaches of the TCO provisions within the provided sections. However, the legislation does state that a TCO does not affect the rights of a person (other than the Commonwealth) as at the date of registration, ensuring that existing rights are not adversely impacted by the new tariff concession. The focus is on the administrative process and the criteria that must be met for a TCO to be issued, rather than punitive measures for non-compliance.