EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0516793
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.
Bulbeck Fire Industries applied for a TCO in respect of certain Fire Extinguishers on 9 December 2005.
Instrument
TCO No 0516793 was made on 03 March 2006. 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. 0516793 is taken to have come into force on 9 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 was enacted by the Parliament of Australia to provide a framework for managing customs duties and other regulatory aspects of imported and exported goods. One significant aspect of this Act is Part XVA, which outlines the procedure for Tariff Concession Orders (TCOs). These orders allow the Chief Executive Officer of Customs to grant tariff concessions on certain goods, effectively lowering the customs duty rate for specified items. This legislative mechanism was introduced to address the problem of ensuring that certain goods, which are not produced domestically or for which no suitable substitute is available domestically, can be imported at a lower duty rate, thereby making them more affordable and accessible. The policy objective behind TCOs is to facilitate the importation of goods that are essential for Australian industries or consumers, but which are not produced locally, thus promoting economic efficiency and consumer choice without disadvantaging existing rights or imposing new liabilities on individuals or entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, outlines a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity that wishes to apply for a tariff concession on specific goods, ensuring that if the application meets the core criteria, the applicant can benefit from a lower rate of customs duty on those goods. The Act is national in scope, applying across the Commonwealth of Australia. However, it excludes certain goods as specified in section 269SJ of the Act, which includes goods that are subject to prohibitions or restrictions. The application process involves a rigorous assessment by the CEO, who must be satisfied that no substitutable goods are produced in Australia in the ordinary course of business. Once a TCO is granted, the specified goods are subject to the reduced duty rate outlined in the order, which can significantly benefit importers by potentially allowing them to claim refunds on duties paid prior to the effective date of the TCO. The Act also mandates consultation through the publication of notices in the Gazette, although in the case of TCO No. 0516793, no objections were received.
Key Provisions
The main operative sections of this legislation, specifically Tariff Concession Instrument No. 0516793 under the Customs Act 1901, revolve around the establishment and effect of a Tariff Concession Order (TCO). Section 269F permits an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of certain goods. If the CEO determines that the application does not pertain to goods specified in section 269SJ, they must then assess whether the application meets the core criteria outlined in section 269C. This criterion requires that no substitutable goods were produced in Australia on the day the application was lodged. If these conditions are met, the CEO is obligated under section 269P(3) to issue a written TCO, declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies, and setting a duty rate.
The obligations imposed by this Act on the parties it governs are primarily centred around the application and approval process for a TCO. The CEO must ensure that any application for a TCO is valid and does not involve goods that are ineligible under section 269SJ. The CEO is also required to publish a notice in the Gazette under subsection 269K(1) inviting submissions from any person who believes there are grounds for the TCO not to be granted. Additionally, the CEO must make a written TCO if the application meets the core criteria set out in section 269C.
Regarding potential breaches and consequences, the legislation does not explicitly outline specific offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO. However, the general framework of the Customs Act 1901 and associated regulations may include provisions for penalties related to non-compliance with customs duties and regulations. For instance, section 126(1)(r) of the Regulations allows importers to apply for a refund of duty on goods imported since the TCO came into force, indicating an administrative remedy rather than a punitive measure. The TCO itself ensures that it does not disadvantage any person or impose liabilities on anyone for actions taken before its registration date, thereby limiting the potential for adverse consequences for non-compliance.