EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0512720
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.
Chubb Fire Safety applied for a TCO in respect of certain fire extinguishers on
22 September 2005.
Instrument
TCO No 0512720 was made on 16 December 2005. It declares that those certain fire extinguishers 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. 0512720 is taken to have come into force on 22 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 Tariff Concession Instrument No. 0512720 was enacted in 2005 under the Customs Act 1901 to address the need for tariff concessions on specific goods that are not produced in Australia, thereby ensuring competitive pricing and market access. This instrument, issued by the Chief Executive Officer of Customs, facilitates the application process for Tariff Concession Orders (TCOs), which lower the customs duty on specified goods if no substitutable goods are produced domestically. The policy objective is to support Australian businesses by reducing the cost of importing certain goods, ultimately aiding in the promotion of fair trade practices and economic efficiency.
The instrument was enacted by the relevant legislature, as outlined in the Customs Act 1901, and came into force on the date the application was lodged, which was 22 September 2005. The process involved publishing a notice in the Gazette to invite submissions from interested parties, although no submissions were received in response. The concession does not affect pre-existing rights or impose liabilities on anyone, and importers can apply for duty refunds on goods imported since the TCO's effective date.
Scope and Application
The Customs Act 1901 applies to the administration of customs duties in Australia, with a specific focus on the establishment and application of Tariff Concession Orders (TCOs) as outlined in Part XVA. This legislation enables the Chief Executive Officer of Customs to grant tariff concessions to certain goods upon application, provided the goods meet the core criteria set out in the Act. These criteria include the absence of substitutable goods produced in Australia at the time of the application. The TCOs apply to specific goods that are subject to the concession, affecting the rate of customs duty applied to those goods. The application process requires the CEO to consider whether the goods are not specified in section 269SJ of the Act, which excludes certain goods from TCO eligibility. The TCOs extend across the Commonwealth and are subject to national customs law. There are no exclusions, exemptions, or specific thresholds outlined in the provided text, but the CEO may make orders and regulations under the Customs Act to further specify the application of the TCOs. The instrument TCO No. 0512720, made on 16 December 2005, is an example of such an order, applying to specific fire extinguishers and reducing the duty rate from 5% to free.
Key Provisions
The Customs Act 1901, under Part XVA, establishes a scheme whereby Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). Section 269F of the Act allows an individual to apply to the CEO for a TCO concerning specific goods. If the CEO determines that the application is not for goods that cannot be subject to a TCO as specified in section 269SJ, the CEO must evaluate whether the application meets the core criteria (section 269C). Specifically, the application meets these criteria if, on the day it was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for terms such as “goods produced in Australia,” “ordinary course of business,” and “substitutable goods” are provided in sections 269D, 269E, and 269F of the Act, respectively.
The obligations under the Act for the CEO include reviewing applications for TCOs and deciding whether they meet the core criteria outlined in section 269C. If satisfied that the application meets these criteria, the CEO must make a written order (a TCO) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). Additionally, the CEO must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). The TCO comes into effect on the day the application is lodged (subsection 269S(1)). In this case, the TCO for the specified fire extinguishers was declared on 16 December 2005 and is taken to have come into force on 22 September 2005.
In terms of potential consequences for breach, the Act does not specify criminal offences or penalties directly related to the failure to comply with TCOs. However, any person aggrieved by the CEO's decision not to issue a TCO or by the terms of a TCO may have the right to seek judicial review or other legal remedies. The Act ensures that the rights of individuals, other than the Commonwealth, are not adversely affected by the TCO as at the date of registration, and it does not impose any liabilities on individuals for actions taken before the registration date. Importers can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations.