EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516509
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.
Interclean Australasia Pty Ltd applied for a TCO in respect of certain carpet spotting mitts on 23 December 2005.
Instrument
TCO No 0516509 was made on 19 May 2006. It declares that those certain carpet spotting mitts 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 7.5%. 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. 0516509 is taken to have come into force on 23 December 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 Parliament of Australia, establishes a framework for the administration of customs and excise duties. One of the key mechanisms within this framework is the Tariff Concession Order (TCO), which allows for the application of lower rates of customs duty on certain goods. The Tariff Concession Instrument No. 0516509, issued in 2006, was introduced to provide relief to businesses by reducing the duty on specific goods that are not readily available within Australia. This was achieved through the application process outlined in the Customs Act, where an applicant can seek a concession if no suitable substitute goods are produced domestically. The policy objective of this legislative measure is to support Australian businesses by reducing import costs and increasing competitiveness, without disadvantaging existing rights or imposing new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, through the Tariff Concession Orders (TCO) framework established under Part XVA, allows for the application of a lower rate of customs duty on certain goods. This process is initiated when an entity, such as Interclean Australasia Pty Ltd, applies to the Chief Executive Officer of Customs for a TCO in respect of goods. The CEO evaluates the application against specific criteria, including whether the goods are not produced in Australia and whether no substitutable goods are produced domestically. Once the CEO determines that the application meets the criteria, a written order is issued, effectively applying a concessional rate of customs duty to the specified goods. The TCO mechanism applies to any person or entity seeking to import goods that meet the eligibility criteria, and its jurisdictional reach is national, aligning with the overarching provisions of the Customs Act 1901. The scope of the Act does not extend to goods specified in section 269SJ, which are ineligible for tariff concessions. Furthermore, the Act can be extended or restricted through subordinate instruments, such as the Customs Tariff Act 1995, which specifies the items in the tariff that may be subject to concessional duty rates.
Key Provisions
The key provisions of this legislation, the Tariff Concession Instrument No. 0516509 under the Customs Act 1901, establish a framework for the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCOs) that lower the customs duty on certain goods. Specifically, section 269F allows a person to apply for a TCO if the goods are not specified in section 269SJ, which lists those that cannot be subject to a TCO. The CEO must then decide if the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If the criteria are met, the CEO must make a written TCO order under section 269P(3), declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995, with a specific rate of duty applied.
In this instance, Interclean Australasia Pty Ltd successfully applied for a TCO on 23 December 2005 for certain carpet spotting mitts, which were declared to be subject to item 50 of Schedule 4, resulting in a duty rate of free instead of the general rate of 7.5%. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, although in this case, no submissions were received. The TCO came into force on the date of application under section 269S(1), and it does not affect the rights of any person to disadvantage them or impose liabilities for actions taken before the registration date.
The obligations imposed by this Act on the CEO and the applicants include ensuring that any TCO application is valid and meets the criteria outlined in sections 269C and 269F. The CEO must also ensure that a notice is published in the Gazette, inviting submissions from any interested parties. Additionally, the CEO is responsible for making the written TCO order if the application meets the criteria. The applicant, in this case, Interclean Australasia Pty Ltd, must provide all necessary information to support their application for a TCO and ensure that the goods in question meet the specified criteria. Failure to comply with these obligations could result in the application being rejected.
There are no explicit offences, penalties, or civil/criminal consequences mentioned in the explanatory statement for breaches of the Act or the TCO. However, it is implied that failure to meet the criteria for a TCO application would result in the application being rejected by the CEO. Additionally, the Act ensures that the rights of any person are not adversely affected by the issuance of a TCO, and it does not impose any liabilities on any person for actions taken before the registration date of the TCO.