EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619398
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 corner drawer kits on 8 December 2006.
Instrument
TCO No 0619398 was made on 9 March 2007. It declares that those certain corner drawer kits 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. 0619398 is taken to have come into force on 8 December 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 Australian Parliament, was supplemented in 2001 to include Part XVA, which allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This addition aimed to address the gap in the duty structure by allowing for tariff concessions on specific goods, thereby reducing the customs duty for these goods when no substitutable goods are produced in Australia. The policy objective underpinning this change is to encourage the importation of goods that are not domestically produced, thus potentially benefiting consumers and businesses by reducing the cost of certain imported goods.
The explanatory statement details Tariff Concession Instrument No. 0619398, which was made on 9 March 2007, concerning corner drawer kits. Blum Australia Pty Ltd had applied for this concession on 8 December 2006. The instrument was issued as the CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria outlined in section 269C of the Act. As a result, the duty rate for these specific corner drawer kits was reduced from the general 5% rate to 0%, effective from the date the application was lodged. No submissions opposing the concession were received by the CEO, and the rights of importers were positively affected, allowing them to seek duty refunds for imports made since 8 December 2006.
Scope and Application
The Customs Act 1901 applies to any person or entity involved in the importation of goods into Australia, including importers, exporters, and customs brokers, as well as the goods themselves, by providing a framework for the imposition and remission of customs duties and other charges. The Act operates under the authority of the Commonwealth and applies to all states and territories within Australia. One of its key provisions, under Part XVA, concerns the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. A TCO can be applied for by any person in relation to specific goods, with the aim of reducing the customs duty on those goods if certain conditions are met, such as the absence of substitutable goods produced in Australia. The scope of the Act can be extended through subordinate instruments, which allow for the detailed specification of goods eligible for tariff concessions and the procedures for applying for such concessions. The Act also includes provisions for public consultation on proposed TCOs and ensures that the implementation of a TCO does not adversely affect the rights of any person as at the date of the TCO’s registration, nor impose any new liabilities on persons other than the Commonwealth.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, 269P and 269S, all found within Part XVA of the Customs Act 1901. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria set out in section 269C, and the goods are not specified in section 269SJ, the CEO must make a TCO declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (Tariff). If the CEO is satisfied that no substitutable goods were produced in Australia on the day the application was lodged, and the goods are produced in Australia in the ordinary course of business, the CEO must make a TCO (subsection 269P(3)). The TCO will come into force on the day the application was lodged (subsection 269S(1)).
The Customs Act 1901 imposes certain obligations on the parties governed by this legislation. The CEO is required to make a TCO if an application meets the core criteria, and the goods are not specified in section 269SJ of the Act. The CEO must also publish a notice in the Gazette inviting any person who considers there are reasons why the TCO should not be made to lodge a submission with the CEO (subsection 269K(1)). If the CEO does not receive any submissions in response to this invitation, the TCO will proceed as planned. Importers of goods subject to a TCO will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force (paragraph 126(1)(r) of the Regulations).
There are no specific offences, penalties, or consequences for breach outlined in this legislation. However, 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, as they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force.