EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618994
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.
Viscount Plastics applied for a TCO in respect of certain plastic handle fitters on 28 November 2006.
Instrument
TCO No 0618994 was made on 2 March 2007. It declares that those certain plastic handle fitters 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. 0618994 is taken to have come into force on 28 November 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. 0618994, enacted in 2007, is an amendment to the Customs Act 1901 designed to address the need for tariff concessions on specific goods that are not produced in Australia. This instrument was introduced to provide a pathway for businesses to apply for reduced customs duty rates on certain imported goods, facilitating trade by lowering the cost of imported items that do not have domestic alternatives. The Customs Act 1901 provides the legislative framework within which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) upon meeting specified criteria. The policy objective is to support Australian businesses by making imported goods more competitively priced relative to any potential domestic production, thus encouraging efficient market outcomes. The instrument was enacted by the Australian Government, reflecting a commitment to economic efficiency and trade facilitation.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) that lower the rate of customs duty on certain goods. This legislation applies to any person or entity that meets the core criteria set out in the Act and applies to goods not produced in Australia in the ordinary course of business. The TCO scheme operates on a national level, governed by the Commonwealth. Any application for a TCO must exclude certain goods specified under section 269SJ of the Act, which includes those that cannot be subject to a TCO. The instrument extends its application through subordinate legislation, which is evidenced by Tariff Concession Instrument No. 0618994. This particular instrument, made on 2 March 2007, concerns plastic handle fitters, reducing their duty rate from 5% to 0% as no substitutable goods were produced in Australia. The commencement of a TCO is effective from the date of application lodging, with this particular TCO taken to have commenced on 28 November 2006. The application does not disadvantage any person or impose liabilities on any person other than the Commonwealth.
Key Provisions
The Customs Act 1901, through its Part XVA, provides a framework for the Chief Executive Officer of Customs (CEO) to make Tariff Concession Orders (TCOs) (s 269F). These orders apply a lower rate of customs duty to certain goods, provided they meet specific criteria. An application for a TCO can be submitted by any person, and if the CEO is satisfied that the application pertains to goods not specified in section 269SJ, they must assess whether it meets the core criteria outlined in section 269C. For a TCO application to be valid, it must be demonstrated that on the day of application, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). Definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269F respectively. If the CEO is satisfied that the application meets these criteria, they must issue a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question (s 269P(3)).
The obligations imposed on the parties under the Act include the requirement for the CEO to make a decision on a TCO application based on the criteria set out in the Act. The CEO must also publish a notice in the Gazette, inviting any interested parties to submit reasons why a TCO should not be made (s 269K(1)). This notice serves to ensure transparency and provide an opportunity for public input before a decision is made. The CEO must also consider whether the application for a TCO meets the core criteria and decide on the appropriate tariff concession based on the information provided. If no submissions are received in response to the Gazette notice, the CEO can proceed with making the TCO without further public input.
In terms of offences, penalties, or consequences for breach, the Act does not specify any criminal penalties for failing to comply with the requirements of a TCO. However, any party that knowingly or recklessly makes a false statement in an application for a TCO may be subject to civil or criminal penalties under other provisions of the Customs Act 1901 or other relevant legislation. The maximum penalties for such offences can vary depending on the specific circumstances and the relevant legislation. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the making of a TCO, and it does not impose any liabilities on any person (s 269S(1)).
The TCO No. 0618994, made on 2 March 2007, declared that certain plastic handle fitters are goods to which item 50 of Schedule 4 to the Customs Tariff Act 1995 applies, as the CEO was satisfied that no substitutable goods were produced in Australia (s 269P(3)). The general rate of duty on these goods is 5%, but the rate for the goods subject to the TCO is 0%. This TCO does not affect the rights of any person other than the Commonwealth as at the date of registration, and it does not impose any liabilities on any person. 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, which is 28 November 2006 (s 269S(1)).