EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0619399
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 door closing silencers on 8 December 2006.
Instrument
TCO No 0619399 was made on 2 March 2007. It declares that those certain door closing silencers 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. 0619399 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, establishes a framework for the imposition of customs duties on imported goods. The Act includes provisions for Tariff Concession Orders (TCOs), which provide for reduced or zero customs duty on certain goods, subject to specific criteria. One such TCO, Instrument No. 0619399, was issued on 2 March 2007 in response to an application by Blum Australia Pty Ltd for tariff concessions on certain door closing silencers. This instrument was introduced to address the need for tariff relief where no substitutable goods were produced in Australia, ensuring the application of the concession is consistent with the policy objectives of the Customs Act 1901. The instrument effectively reduces the duty rate for these silencers from 5% to 0% and is designed to benefit importers without imposing any new liabilities.
Scope and Application
The Customs Act 1901, as amended, applies to any individual or entity that imports goods into Australia and seeks to benefit from tariff concessions under the Act. Specifically, the Act pertains to the application process for Tariff Concession Orders (TCOs), which are designed to reduce the customs duty on certain goods. The CEO of Customs evaluates applications to determine if they meet the core criteria, particularly focusing on whether substitutable goods are produced in Australia. If the application is deemed to meet these criteria, the CEO issues a TCO, which applies a reduced rate of customs duty on the specified goods. The Act has a national jurisdictional reach, as it is a Commonwealth Act. Exclusions to the application of the Act include goods specified in section 269SJ, which cannot be subject to a TCO. The Act also allows for the extension or restriction of its application through subordinate instruments such as regulations, which provide further detail on the application process and the administration of TCOs. The Explanatory Statement for Instrument No. 0619399 clarifies that the TCO in question pertains to certain door closing silencers, with a general rate of duty of 5% reduced to 0% under the specified item of the Customs Tariff.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0619399 under the Customs Act 1901, as referenced in section 269F, allow an applicant to request a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs (CEO). If the application meets the core criteria outlined in section 269C, the CEO is required to make a TCO. Specifically, the TCO declares that the goods in question are subject to a lower rate of customs duty, in this case, a reduction from 5% to 0%, as outlined in Schedule 4 of the Customs Tariff Act 1995. The core criteria for this decision, as per section 269C, is that no substitutable goods are being produced in Australia at the time of the application, which is further defined in sections 269D, 269E, and 269F of the Act.
Under this legislation, the CEO has specific obligations, including the requirement to publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any person to lodge submissions if they believe the TCO should not be made. This requirement is detailed in subsection 269K(1) of the Act. The CEO must also ensure that the application meets the core criteria, which involves confirming that no substitutable goods are being produced in Australia. Additionally, the TCO must come into effect on the day the application was lodged, as specified in subsection 269S(1) of the Act.
The Act outlines various consequences for non-compliance with its provisions. Although the explanatory statement does not specify criminal penalties, it does mention that the TCO does not disadvantage any person or impose liabilities on any person other than the Commonwealth. Any person adversely affected by the TCO could potentially seek legal remedies, but the specific civil consequences are not detailed in the explanatory statement. It is important to note that the rights of importers will be beneficially affected, and they may apply for a refund of duty on goods imported since the TCO came into effect under paragraph 126(1)(r) of the Regulations.