EXPLANATORY STATEMENT

Tariff Concessions Revocation Instrument No.150/2007

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.

Gray-Nicholls Sports Pty Ltd applied for a TCO in respect of sport bags in May 2005.  In June 2007, after consideration of an request for revocation from Adventure One Pty Ltd, the delegate of the CEO refused to revoke TCO 0505972. 

Section 269SH of the Act allows a person affected by a decision in relation to a TCO application, who objects to the making of the decision, to apply to the CEO for its reconsideration.

Subsection 269SH(5) provides that where application is made for reconsideration of a decision made on a request for revocation, the CEO, having regard to:

(a)   The request for revocation; and

(b)   The information, documents and materials which the CEO was entitled to take into account in considering the request; and

(c)    Any new matter produced to the CEO by the applicant for reconsideration which, under subsection (7), the CEO is not prevented from taking into account for that purpose;

must decide, not later than 60 days after the last day for lodgement of the application for reconsideration, whether to affirm the original decision or to substitute any other decision that the CEO might have made.

Under subsections 269SH(8) and (9) of the Act, where the CEO, on reconsideration, decides to substitute another decision, the substituted decision is taken to have been made when the original decision was made and if the substituted decision involves making a TCO, the TCO comes into force on the day on which, if the original decision had involved making the TCO, that TCO would have come into force.

In August 2007, Adventure One Pty Ltd requested that the CEO reconsider the decision to refuse to revoke TCO 0505972.

In September 2007, a delegate of the CEO decided to overturn the original decision to refuse to revoke TCO 0505972.  The substituted decision was to revoke TCO 0505972.

Instrument

TCO No 0505972 was revoked on 17 September 2007.  It declares that sport bags are goods to which item 50 of Schedule 4 to the Tariff applies since the CEO was satisfied that 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

At the time the original TCO was made, the CEO published a notice in the Gazette, under section 269K of the Act, which included 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. .

At the time the request for revocation was lodged, the CEO published a notice in the Gazette in accordance with section 269SC of the Act regarding the fact that a request for revocation had been received.  There is no provision for affected parties to lodge a submission with the CEO regarding why the TCO should not be revoked. 

Under subsection 269SH(3A), the CEO must publish a Gazette notice (as soon as practicable after receiving a request) stating:

(a)  that the request has been lodged; and

(b)  the date that the request was lodged; and

(c)  the full particulars of the TCO to which the request relates.

Such a notice was published in the Gazette on 13 June 2007. 

Commencement

Subsection 269SH(9) provides relevantly, if the substituted decision involves the making of an order revoking a TCO, that revocation comes into force on the day on which, if the original decision had involved making an order revoking a TCO, that order would have come into force.  Accordingly, the revocation date has effect from the 6 June 2007.