EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0833359
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.
Atdec Pty Ltd applied for a TCO in respect of certain ceiling mountings on 30 September 2008.
Instrument
TCO No 0833359 was made on 19 December 2008. It declares that those certain ceiling mountings 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 free.
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. 0833359 is taken to have come into force on 30 September 2008.
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 was enacted to provide for the administration of customs and excise duties, as well as the control of goods imported into or exported from Australia. It establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, allowing for a lower rate of customs duty on specified goods. This legislation was introduced to address the need for flexibility in applying customs duties, ensuring that Australia's trade policies are responsive to economic and market conditions. The policy objective is to facilitate trade by reducing the duty burden on certain goods that are not produced domestically, thereby supporting competitiveness and economic growth.
The Tariff Concession Instrument No. 0833359, issued under this Act, was created in response to an application by Atdec Pty Ltd for a TCO concerning certain ceiling mountings. The instrument was made on 19 December 2008, declaring that these specific goods are subject to a free rate of duty, rather than the general 5% rate, as no substitutable goods were produced in Australia. The instrument came into effect on 30 September 2008, the date the application was lodged, and provides benefits to importers by allowing them to apply for a refund of duty on goods imported since that date.
Scope and Application
The Customs Act 1901, through its Part XVA, facilitates the application of Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs for specific goods, providing a lower rate of customs duty. This mechanism applies to any individual or entity seeking tariff concessions for goods that are not prohibited under section 269SJ of the Act, provided they meet the core criteria outlined in section 269C, which includes the absence of substitutable goods produced in Australia at the time of application. The geographic reach of this Act is national, applying across all states and territories of Australia. Notably, TCO No. 0833359, made in respect of certain ceiling mountings, became effective from the date of application, 30 September 2008, and imposes no liabilities on any person, while potentially benefiting importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date. This legislative framework is further refined through subordinate instruments, which may extend or restrict the application of TCOs.
Key Provisions
The Customs Act 1901 (the Act) provides for the establishment of Tariff Concession Orders (TCOs) through Part XVA, which allows for reduced customs duty rates on certain goods. Section 269F (1) of the Act allows an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a TCO regarding specified goods. If the CEO determines that the application pertains to goods not prohibited by section 269SJ of the Act, they must then assess whether the application meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the day it was lodged, no substitutable goods were being produced in Australia in the ordinary course of business.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must ensure that applications are valid and meet the core criteria before issuing a TCO. The CEO must also publish a notice in the Gazette (subsection 269K(1)) inviting public submissions if they consider the TCO should not be made. In this instance, no submissions were received. The CEO's role includes determining whether the application aligns with the legislative requirements and ensuring that the TCO is made in accordance with the Act's provisions.
The Act does not explicitly detail offences, penalties, or civil/criminal consequences for breaches related to the issuance or application of a TCO. However, the Customs Act 1901 as a whole includes various provisions for penalties and enforcement actions for breaches of customs laws. For example, subsection 263(1) of the Act states that a person who commits an offence against the Act is liable to a penalty not exceeding the greater of three times the value of the goods involved or the amount of duty and/or tax that would have been payable if the offence had not occurred. The specific penalties for breaches would depend on the nature and severity of the offence under the broader customs legislation.