EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0411939
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.
Ingersoll Rand Australia Pty Ltd applied for a TCO in respect of certain door closers on 10 November 2004.
Instrument
TCO No 0411939 was made on 1 February 2005. It declares that those certain door closers 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 3%.
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. 0411939 is taken to have come into force on 10 November 2004.
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. 0411939, made under the Customs Act 1901, was enacted to provide a lower rate of customs duty on certain door closers, as applied for by Ingersoll Rand Australia Pty Ltd. This instrument was introduced to address the gap in tariff concessions for specific imported goods where no substitutable goods are produced in Australia. The Tariff Concession Orders (TCOs) scheme, outlined in Part XVA of the Customs Act 1901, allows the Chief Executive Officer of Customs to grant tariff concessions if certain criteria are met, specifically when no substitutable goods are produced domestically. The instrument was made on 1 February 2005, and it reduced the duty on the specified door closers from 5% to 3%. The policy objective of this instrument is to ensure that importers benefit from reduced customs duty rates without imposing any new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 0411939, under Part XVA of the Customs Act 1901, applies to any entity or individual seeking tariff concessions on certain goods imported into Australia. Specifically, it targets importers of goods that are the subject of a Tariff Concession Order (TCO), where the goods must not be specified in section 269SJ of the Act and must meet the core criteria outlined in sections 269C and 269D. The Act's application is nationwide, extending across the Commonwealth of Australia, and it specifically affects the importation of certain door closers by applying a reduced customs duty rate as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument does not impose any new liabilities or affect the pre-existing rights of any person other than the Commonwealth. It is important to note that any person considering the implications of the TCO can review the details once published in the Gazette, and while no objections were received during the consultation period, the TCO's effect is retrospective to the date of application lodging.
Key Provisions
The key sections of this legislation, specifically the Customs Act 1901, establish a framework for the creation of Tariff Concession Orders (TCOs) under Part XVA. A TCO is an order made by the Chief Executive Officer (CEO) of Customs that applies a lower rate of customs duty to certain goods. This process begins when a person applies for a TCO under section 269F, provided the goods in question are not those listed in section 269SJ which are ineligible for TCOs. If the CEO determines that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia at the time of application, a TCO will be issued. Section 269P(3) further stipulates that the CEO must issue a written order declaring the goods subject to the TCO, specifying the applicable tariff item from Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Customs Act 1901 on the parties involved are primarily centred on the application and assessment process for TCOs. The CEO of Customs is obligated to evaluate applications for TCOs to ensure they meet the core criteria, specifically checking that no substitutable goods were produced in Australia at the time of the application. Once an application is deemed valid, the CEO must issue a written TCO. The applicant must ensure that their application is accurate and that it does not pertain to goods that are ineligible under section 269SJ. The CEO is also required to publish a notice in the Gazette, inviting any interested parties to make submissions if they believe the TCO should not proceed, as per subsection 269K(1). If no submissions are received, the TCO can proceed.
Breaching the provisions of the Customs Act 1901 can lead to various consequences. If a person knowingly submits an ineligible application or provides false information, they could be subject to penalties under the Act. While the specific penalties are not detailed in the explanatory statement, penalties for such breaches typically include fines and, in severe cases, imprisonment. Additionally, the Act ensures that the rights of importers are protected, allowing them to apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any liabilities on any person, ensuring that only the Commonwealth benefits from the tariff reduction.