EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0514902
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.
Icon2 Commercial Products applied for a TCO in respect of certain Trolleys on 26 October 2005.
Instrument
TCO No 0514902 was made on 16 January 2006. It declares that those certain Trolleys 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 0%.
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. 0514902 is taken to have come into force on 26 October 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 Commonwealth Parliament, establishes a framework for the regulation of imports and exports in Australia, including provisions for tariff concession orders (TCOs). The act was introduced to address the need for streamlined customs processes and to facilitate international trade by reducing customs duties on certain goods under specific circumstances. The Tariff Concession Instrument No. 0514902, made on 16 January 2006, is an example of such regulation, where a lower customs duty rate is applied to certain trolleys, reflecting the policy objective of supporting commercial entities by reducing their import costs. This instrument is designed to ensure that the application of tariff concessions is fair and benefits businesses without imposing additional burdens on importers or disadvantaging existing stakeholders.
Scope and Application
The Customs Act 1901, specifically under Part XVA, provides a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This process allows for the application of a lower rate of customs duty on specified goods, provided the application meets the core criteria outlined in the Act. A TCO can be applied for by any person, and if the CEO determines that the application does not involve goods that are explicitly excluded under section 269SJ, they must then assess whether the application meets the core criteria, such as the absence of substitutable goods being produced in Australia. If the application is deemed to meet these criteria, the CEO issues a written order, which specifies that the goods in question will be subject to a reduced customs duty rate as outlined in the Customs Tariff Act 1995. The TCO mechanism ensures that the rights of any person, other than the Commonwealth, are preserved and not adversely affected by the issuance of the TCO.
The application of a TCO is governed by federal legislation and has a nationwide jurisdictional reach across Australia. It does not impose any liabilities on persons other than the Commonwealth and does not affect pre-existing rights. The process of issuing a TCO involves public consultation, where any interested parties can lodge submissions if they believe the TCO should not proceed. Any exclusions or exemptions are clearly defined in the Act, and the application of the TCO is further extended or restricted through subordinate instruments as necessary.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0514902, pursuant to the Customs Act 1901, pertain to the process and criteria for issuing Tariff Concession Orders (TCOs) (section 269F). A TCO allows for a lower rate of customs duty on certain goods, provided that the goods are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. For a TCO to be granted, the Chief Executive Officer of Customs (CEO) must be satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The definitions of "goods produced in Australia," "ordinary course of business," and "substitutable goods" are outlined in sections 269D, 269E, and 269F respectively.
The Act imposes several obligations on the parties involved. An applicant must submit a valid application to the CEO, who must then assess whether the application meets the core criteria (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made (subsection 269K(1)). If the CEO is satisfied that the application meets the criteria and no objections are received, the CEO must issue a written order, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (subsection 269P(3)).
In terms of offences, penalties, or consequences for breach, the Act does not specify criminal penalties for failing to comply with the requirements of a TCO. However, any person who contravenes the provisions of the Customs Act 1901 may be liable for civil penalties. Under section 283 of the Act, an entity that commits an offence can be fined up to 10,000 penalty units or, in the case of a continuing failure to comply, an additional fine of up to 1,000 penalty units for each day the failure continues. For natural persons, the maximum penalty is 5,000 penalty units. The Act also provides for the imposition of pecuniary penalties for administrative breaches, with the amount of the penalty varying based on the seriousness of the breach. The specifics of these penalties are not detailed in the explanatory statement but would be governed by the broader provisions of the Customs Act 1901.