EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0609406
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.
The Australian Trellis Door Co applied for a TCO in respect of certain metal security grills on 31 May 2006.
Instrument
TCO No 0609406 was made on 11 August 2006. It declares that those certain metal security grills 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. 0609406 is taken to have come into force on 31 May 2006.
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. 0609406, enacted under the Customs Act 1901, was introduced to address the need for concessional tariff rates for specific goods not produced in Australia, thereby encouraging their importation. This instrument was developed in response to an application by the Australian Trellis Door Co for tariff concessions on certain metal security grills. The Act was enacted by the Australian Parliament and the policy objective of this particular instrument is to ensure that the importation of goods not produced domestically is facilitated by a lower customs duty rate, thus promoting economic efficiency and consumer access. The instrument does not disadvantage existing rights holders or impose new liabilities on them, and instead seeks to benefit importers by potentially allowing them to claim refunds on duties paid prior to the concession taking effect.
Scope and Application
The Tariff Concession Instrument No. 0609406, enacted under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been granted, in this case certain metal security grills. This instrument is applicable to the entities or individuals involved in the importation of these goods, thereby granting them the benefit of a lower rate of customs duty, in this instance, free duty instead of the general rate of 5%. The Act's jurisdiction is national, as it pertains to the Commonwealth of Australia and its customs duties. The legislation does not specify any exclusions or exemptions beyond those outlined in section 269SJ of the Act, which excludes certain goods from TCO consideration. The scope of the Act can be extended or restricted through subordinate instruments, as indicated by the process outlined for the application and approval of TCOs. The commencement of this particular TCO aligns with the date of the application, 31 May 2006, ensuring that the benefits are retroactively applicable from that date, without affecting the rights or imposing liabilities on any person prior to the registration of the TCO.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0609406 under the Customs Act 1901 (the Act) include sections 269C, 269B, 269D, 269E, 269P, and 269SJ. These sections establish the criteria and process for the Chief Executive Officer of Customs (the CEO) to consider when deciding whether to make a Tariff Concession Order (TCO). Specifically, section 269C sets out that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied the application meets the core criteria, they must issue a written TCO. Section 269SJ specifies that certain goods, such as those that are subject to prohibitive import controls, cannot be the subject of a TCO.
Under this legislation, the CEO has the responsibility to assess applications for TCOs against the core criteria. This involves verifying that the goods in question are not being produced in Australia in the ordinary course of business and are not of the type specified in section 269SJ. The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may have reasons to oppose the TCO. Once a TCO is issued, the CEO is required to make it known that the goods in question are now subject to the concessions outlined in the order. The TCO itself is considered to have come into effect from the date the application was lodged.
Failure to comply with the obligations set out in this legislation can result in penalties. Although the specific offences and penalties are not detailed in the provided text, the Customs Act 1901 generally includes provisions for both civil and criminal penalties for breaches of customs regulations. Civil penalties might include fines, while criminal penalties could involve imprisonment, depending on the severity of the breach. The Act also ensures that any rights of individuals, apart from the Commonwealth, are protected and that no new liabilities are imposed retroactively as a result of a TCO.