EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512266
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.
Finemark Homewares Pty Ltd applied for a TCO in respect of certain glassware bar sets on 20 September 2005.
Instrument
TCO No 0512266 was made on 12 December 2005. It declares that those certain glassware bar sets 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.0512266 is taken to have come into force on 20 September 2005.
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, enacted by the Australian Parliament, establishes a framework for the imposition of customs duties and provides mechanisms for tariff concessions. The Act was introduced to streamline the process for applying for tariff reductions on specific goods, ensuring that they are granted where appropriate and subject to certain criteria. One such mechanism is the Tariff Concession Order (TCO) under Part XVA of the Act, which allows the Chief Executive Officer of Customs to grant lower rates of customs duty on goods subject to such orders. The explanatory statement for Instrument No. 0512266 details the process and rationale behind a specific TCO for glassware bar sets applied for by Finemark Homewares Pty Ltd on 20 September 2005. The CEO determined that no substitutable goods were produced in Australia and thus approved the TCO, effective from the date of application, with the duty rate for these goods set at free, down from the general rate of 5%. The process involved public consultation as per section 269K(1) of the Act, though no objections were received.
Scope and Application
The Tariff Concession Instrument No. 0512266 under the Customs Act 1901 applies to specific goods, in this instance certain glassware bar sets, and pertains to the application and administration of customs duty. The legislation allows for the reduction of customs duty on goods that are the subject of a Tariff Concession Order (TCO), provided the goods are not produced in Australia and no substitutable goods exist. The geographic scope of the Act is national, with the CEO of Customs having the authority to make such orders, which are binding throughout Australia. The instrument was made in response to an application by Finemark Homewares Pty Ltd on 20 September 2005 and was published in the Gazette on 12 December 2005, with no objections received. The TCO came into effect on the date of the application, 20 September 2005, and does not retroactively affect any rights or impose liabilities on individuals other than the Commonwealth. This instrument is subject to further regulation and interpretation through subordinate instruments under the Customs Act 1901 and the Customs Tariff Act 1995.
Key Provisions
The main sections of the Customs Act 1901 relevant to this Tariff Concession Order (TCO) include sections 269C, 269B, 269D, 269E, 269F, 269K, 269P, 269S, and 269SJ (269C(1)). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, the CEO must make a written order (the TCO) specifying that the goods in question are subject to a lower rate of customs duty as outlined in the Tariff. The CEO is required to publish a notice in the Gazette inviting submissions on the application, as per section 269K. The TCO comes into force on the date the application was lodged (269S(1)).
The obligations imposed by the Act on the parties involved are primarily on the CEO and the applicant. The CEO must ensure that the application meets the core criteria, which involves confirming that no substitutable goods are produced in Australia (269C). This includes determining that the goods in question are not specified in section 269SJ of the Act and that there are no substitutable goods produced in Australia that could replace the imported goods. The applicant, in this case, Finemark Homewares Pty Ltd, must provide sufficient information to support their application and comply with any requirements set forth by the CEO.
There are no explicit offences, penalties, or civil/criminal consequences stated in the explanatory statement for failing to comply with the requirements of a TCO. However, if an entity fails to adhere to the conditions or misrepresents information in their application, it could lead to the TCO being revoked or not granted, potentially resulting in the full duty rate applying to the imported goods. The CEO has the discretion to investigate and take appropriate action against any non-compliance, which might include financial penalties or legal action as per other provisions of the Customs Act.
The Tariff Concession Order No. 0512266, effective from 20 September 2005, benefits importers of certain glassware bar sets by applying a zero rate of duty on these goods, reducing their overall import costs. The TCO does not impose any liabilities on any person and protects the rights of importers who may be eligible to apply for a refund of duty on goods imported since the TCO came into force. The Act ensures that the rights of other persons, apart from the Commonwealth, are not adversely affected by the TCO.