EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0610728
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.
Blum Australia Pty Ltd applied for a TCO in respect of certain cabinet door lifters on 22 June 2006.
Instrument
TCO No 0610728 was made on 15 September 2006. It declares that those certain cabinet door lifters 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. 0610728 is taken to have come into force on 22 June 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 Customs Act 1901, enacted by the Commonwealth Parliament, provides a framework for the imposition of tariffs on imported goods. In addressing the economic and competitive needs of Australian businesses, the Act allows for the establishment of Tariff Concession Orders (TCOs) through Part XVA, which enable the application of a lower rate of customs duty on specified goods. The primary objective of this legislative instrument is to support Australian industries by reducing the cost of imported goods, thereby enhancing their competitiveness. The instrument, Tariff Concession Instrument No. 0610728, was introduced to provide tariff concessions on certain cabinet door lifters, following an application by Blum Australia Pty Ltd. The instrument ensures that these goods benefit from a zero duty rate, effective from the date of the application, while maintaining the rights of importers to claim refunds for duties paid prior to the concession.
Scope and Application
The Customs Act 1901, as amended, includes a provision for the establishment of Tariff Concession Orders (TCOs) through Part XVA, allowing for reduced customs duty rates on specified goods. The application for a TCO must be made to the Chief Executive Officer of Customs (CEO), who assesses whether the application meets the core criteria established in section 269C of the Act. This assessment involves determining if substitutable goods are produced in Australia on the date the application is lodged. If no such goods are produced, and the goods in question are not restricted under section 269SJ, the CEO is mandated to issue a TCO. For example, in the case of Blum Australia Pty Ltd’s application for certain cabinet door lifters, the CEO issued TCO No. 0610728 on 15 September 2006, declaring these goods to be subject to a 0% duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995. This order came into effect on the date of the application, 22 June 2006, without retroactively affecting any pre-existing rights or imposing new liabilities on individuals or entities other than the Commonwealth. The application process also involves public consultation, as per section 269K(1) of the Act, although in this instance, no submissions were received.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0610728 (Tariff Concession Order 0610728) under the Customs Act 1901 require the Chief Executive Officer of Customs (CEO) to make a TCO if the application for such an order meets certain core criteria. Specifically, section 269C (1) of the Act states 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) further mandates that if the CEO is satisfied that the application meets these criteria, they must issue a written order (a TCO) declaring that the goods subject to the TCO application are goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This particular TCO, No. 0610728, was made on 15 September 2006 and applies to certain cabinet door lifters, declaring that these goods are subject to item 50 of Schedule 4 to the Tariff, with a duty rate of free, as opposed to the general rate of 5%.
The obligations imposed by the Act on the parties it governs include the requirement for Blum Australia Pty Ltd to lodge a valid application for a TCO if they wish to obtain tariff concessions for their goods. The CEO must then determine if the application meets the core criteria and, if satisfied, issue a written TCO. Additionally, the CEO has an obligation to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to lodge submissions. This particular TCO application, however, did not receive any submissions in response to this invitation.
Any breaches of the provisions set out in the Customs Act 1901 can result in various civil or criminal consequences. However, the Explanatory Statement for this particular TCO does not specify any offences, penalties, or civil/criminal consequences for breach. It is important to note that the TCO does not affect the rights of any 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. Furthermore, 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.