EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612375
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 lifter parts on 21 July 2006.
Instrument
TCO No 0612375 was made on 13 October 2006. It declares that those certain cabinet door lifter parts 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. 0612375 is taken to have come into force on 21 July 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. 0612375, enacted in 2006, is a legislative measure designed to provide tariff concessions for specific goods under the Customs Act 1901. This instrument was introduced to address the need for tariff relief for certain imported goods, ensuring that Australian businesses and consumers benefit from reduced customs duties. The instrument was enacted by the Parliament of Australia, with the aim of facilitating trade and economic efficiency by reducing the cost of importing specified goods. In this instance, the Customs Act 1901 was amended to provide a concession for certain cabinet door lifter parts, reducing the customs duty rate from 5% to 0%, thereby benefiting importers of these goods.
Scope and Application
The Customs Act 1901, through its Tariff Concession Orders (TCOs), applies to goods specified in an application for tariff concession, allowing for a lower rate of customs duty for those goods. The Act permits the Chief Executive Officer of Customs to make a TCO if certain criteria are met, specifically if no substitutable goods are produced in Australia in the ordinary course of business on the day the application is lodged. The scope of the Act includes any entity or individual seeking to import goods eligible for tariff concessions, and it applies across the Commonwealth of Australia. However, it excludes goods specified in section 269SJ of the Act that cannot be subject to a TCO. The Act can extend its application through subordinate instruments, as evidenced by TCO No. 0612375 which applies to certain cabinet door lifter parts. The TCOs do not disadvantage any person by affecting their rights as at the date of registration, nor do they impose any liabilities for actions taken before the registration date, while beneficially affecting the rights of importers who may apply for a refund of duty on goods imported since the TCO came into force.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0612375, under the Customs Act 1901, establish the framework for the application and approval of Tariff Concession Orders (TCOs) (sections 269C, 269P, 269K). These sections require an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of specific goods, provided that the goods are not prohibited under section 269SJ of the Act. The CEO must then determine whether the application meets the core criteria stipulated in section 269C, which includes ensuring that no substitutable goods are produced in Australia in the ordinary course of business at the time the application is lodged. If the core criteria are met, the CEO is mandated to issue a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. For instance, section 269P(3) requires the CEO to make a written TCO if the application meets the core criteria. Section 269K(1) mandates the CEO to publish a notice in the Gazette, inviting any interested party to submit their views on why a TCO should not be granted. These provisions ensure transparency and provide a mechanism for interested parties to voice their concerns. Blum Australia Pty Ltd, as the applicant, must ensure that their application is complete and meets all the stipulated criteria. Furthermore, the CEO has the responsibility of verifying the application and making a timely decision.
Section 269S(1) of the Customs Act 1901 outlines the commencement date of the TCO, which is the same as the date the application was lodged. In this case, TCO No. 0612375 is deemed to have come into force on 21 July 2006. The Act also stipulates that the TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken prior to the registration date. Importers, however, stand to benefit as they can apply for a refund of duty on goods imported since the effective date of the TCO. There are no civil or criminal penalties specified for breaches of the TCO provisions, but non-compliance with customs regulations generally can lead to significant financial penalties and other legal consequences.