EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0705867
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.
Thinking Ergonomix Pty Ltd applied for a TCO in respect of certain furniture connectors and adaptors on 23 April 2007.
Instrument
TCO No 0705867 was made on 29 June 2007. It declares that those certain furniture connectors and adaptors 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. 0705867 is taken to have come into force on 23 April 2007.
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, establishes a framework for the regulation of customs and excise in Australia. It includes provisions for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which aim to provide reduced customs duty rates on specified goods under certain conditions. This legislative instrument, specifically the Tariff Concession Instrument No. 0705867, was introduced to address the need for tariff concessions for certain furniture connectors and adaptors, as applied for by Thinking Ergonomix Pty Ltd on 23 April 2007. The objective is to ensure that these goods benefit from a zero per cent duty rate, rather than the general rate of 5 per cent, provided that no substitutable goods are produced in Australia. The instrument was made on 29 June 2007 and came into force on the date of the application, 23 April 2007, without any submissions opposing the concession and without disadvantaging or imposing liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 0705867, under the Customs Act 1901, applies to specific imported goods, namely certain furniture connectors and adaptors, as identified by Thinking Ergonomix Pty Ltd. The instrument grants these goods a tariff concession, reducing the general rate of duty from 5% to 0%. This concession applies to entities or individuals importing these goods into Australia and is effective from the date the application for the concession was lodged, which was 23 April 2007. The instrument is applicable nationally and is subject to the conditions stipulated in Part XVA of the Customs Act 1901. The instrument excludes goods specified in section 269SJ of the Act, which cannot be subject to a tariff concession order. The CEO of Customs must ensure that no substitutable goods were produced in Australia at the time of the application, as per section 269C of the Act. The instrument does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person. Importers may apply for a refund of duty on goods imported since the TCO came into force, as per paragraph 126(1)(r) of the Regulations.
Key Provisions
The Customs Act 1901 provides a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (section 269F). These orders apply a reduced rate of customs duty to specified goods. For an application for a TCO to be considered, it must not pertain to goods listed in section 269SJ, which are ineligible for TCOs. If an application is deemed eligible, the CEO assesses whether it meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia on the application date (section 269P(3)). A TCO is issued if the CEO determines that the goods in question do not have substitutable counterparts produced domestically (section 269B and 269E).
The TCO process mandates certain obligations on the applicant and the CEO. The applicant must submit a valid application that does not pertain to restricted goods (section 269SJ). The CEO has the duty to assess the application against the core criteria and, if satisfied, issue a written order specifying the tariff concession for the goods (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit objections to the TCO, although in this case, no submissions were received (subsection 269K(1)).
The Act does not explicitly detail specific offences or penalties for breaches related to the issuance of TCOs, but it is implicit that any misuse or non-compliance with the Act's provisions could lead to legal consequences. The Customs Act 1901 includes general provisions for penalties for breaches of the Act, which could encompass fines or imprisonment, although the exact penalties are not detailed in this specific TCO context. Furthermore, the Act ensures that the issuance of a TCO does not adversely affect the rights of persons as of the registration date, nor does it impose liabilities for actions taken prior to the TCO's effective date (subsection 269S(1)).