EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840195
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.
Centor Australia Pty Ltd applied for a TCO in respect of certain bifold door hinge sets on 18 November 2008.
Instrument
TCO No 0840195 was made on 30 January 2009. It declares that those certain bifold door hinge sets 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. 0840195 is taken to have come into force on 18 November 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 Tariff Concession Instrument No. 0840195 was enacted in 2009 under the Customs Act 1901 to provide a concession on customs duty for certain bifold door hinge sets. The instrument was introduced to address the gap in tariff concessions for goods that are not produced in Australia and have no substitutable goods available domestically, thereby promoting competitive pricing and potentially stimulating import demand. This instrument was created by the Chief Executive Officer of Customs in accordance with section 269F of the Customs Act, which allows for applications for tariff concessions where specified criteria are met. The policy objective behind this legislation is to ensure that certain imported goods are subject to a lower rate of customs duty, which can contribute to the availability of competitively priced goods in the Australian market. The instrument became effective from 18 November 2008, the date on which the application was lodged, and it was published in the Gazette with an invitation for submissions, though none were received. This tariff concession aims to benefit importers by allowing them to apply for a refund of duty on goods imported since the commencement date of the tariff concession order.
Scope and Application
The Customs Act 1901 provides for the creation of Tariff Concession Orders (TCOs) to apply lower rates of customs duty on certain goods, administered by the Chief Executive Officer of Customs. When an applicant, such as Centror Australia Pty Ltd, submits an application for a TCO, the CEO assesses whether the goods specified in the application are not produced in Australia in the ordinary course of business, and if they meet the core criteria set out in the Act. If the CEO is satisfied, a TCO is made, which applies a lower rate of customs duty to the specified goods, as demonstrated in the case of the bifold door hinge sets for which a TCO was issued on 30 January 2009. The TCO process includes a mandatory publication in the Gazette to allow for any objections, although in this instance, no submissions were received. Importantly, the TCO does not affect pre-existing rights or impose liabilities on anyone for actions taken prior to its issuance, while providing potential benefits such as duty refunds to importers of the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901, specifically relating to Tariff Concession Orders (TCOs), are found in Part XVA. Section 269F allows an application to be made to the Chief Executive Officer (CEO) of Customs for a TCO in respect of certain goods. Section 269C outlines the core criteria that must be met for the application to be considered valid, primarily focusing on whether substitutable goods are produced in Australia. If the CEO is satisfied that these criteria are met, they must make a written order under section 269P(3), specifying that the goods in question are subject to a prescribed item in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes several obligations on the parties involved. Firstly, an applicant such as Centror Australia Pty Ltd must ensure that their application for a TCO meets the specified criteria and provides sufficient evidence that no substitutable goods are produced in Australia. The CEO, upon receiving a valid application, is obligated to make a written order if the core criteria are satisfied. Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, although no submissions were received in this case.
In terms of potential breaches and consequences, section 269SJ of the Act specifies goods that cannot be subject to a TCO, which includes certain prohibited or restricted items. If an application is made for such goods, it would be considered invalid, and no TCO would be issued. Moreover, section 269H outlines the process for revoking a TCO if it is found that the core criteria were not met at the time of application. Any party found to have provided false or misleading information in their application could face civil or criminal penalties. However, the specific penalties are not detailed in the explanatory statement, and it would be necessary to refer to other sections of the Act or related legislation for precise information on potential sanctions.
In conclusion, the TCO process is designed to facilitate reduced customs duty on specific goods, provided they meet the core criteria outlined in the Customs Act 1901. Both applicants and the CEO have distinct roles and responsibilities to ensure the validity and appropriateness of any TCO. Any failure to comply with the Act's requirements could lead to the TCO being revoked and potential legal repercussions for the applicant.