EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0840196
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 fittings on 18 November 2008.
Instrument
TCO No 0840196 was made on 30 January 2009. It declares that those certain bifold door fittings 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. 0840196 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 Customs Act 1901, enacted by the Australian Parliament, provides a framework for the imposition of customs duties on imported goods. One of its key provisions allows for the application of tariff concession orders (TCOs) to certain goods, thereby granting lower rates of customs duty under specific circumstances. This legislative instrument, Tariff Concession Instrument No. 0840196, was introduced to address the gap in duty concessions for goods that are not substitutable by Australian-produced items. The objective of this particular instrument was to provide relief on customs duties for certain bifold door fittings, as requested by Centor Australia Pty Ltd. The instrument was made by the Chief Executive Officer of Customs, following the satisfaction of core criteria, and it came into force on the date the application was lodged, 18 November 2008, with no adverse effects on pre-existing rights or liabilities.
Scope and Application
The Tariff Concession Instrument No. 0840196, made under Part XVA of the Customs Act 1901, applies to any person who has applied for a Tariff Concession Order (TCO) for goods in respect of which a lower rate of customs duty is sought. This Act allows the Chief Executive Officer of Customs to make TCOs if certain conditions are met, including the absence of substitutable goods produced in Australia in the ordinary course of business. The TCO in question pertains specifically to certain bifold door fittings, where the general rate of duty is 5%, but the rate for these goods under the TCO is free. This instrument is applicable on a national level, as it operates under the framework of the Commonwealth Customs Act. The TCO does not affect any existing rights of persons other than the Commonwealth and does not impose any liabilities on any person for actions taken prior to the TCO's registration. Importers of the specified goods will benefit from the ability to apply for a refund of duty on goods imported since the effective date of the TCO, which is 18 November 2008.
Key Provisions
The key provisions of the legislation establish the framework for Tariff Concession Orders (TCOs) under the Customs Act 1901. Under section 269F, any person may apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application is not for goods specified in section 269SJ, which are ineligible for a TCO, the CEO must assess whether it meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business, as defined in sections 269D and 269E. If satisfied, the CEO must make a written order (section 269P(3)) applying a prescribed rate of duty specified in Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act require the CEO to publish a notice in the Gazette (subsection 269K(1)) inviting submissions from any interested parties. This ensures transparency and allows stakeholders to voice their opinions on the proposed concession. The CEO did not receive any submissions in response to the notice for TCO No. 0840196. The TCO itself, as declared by TCO No. 0840196, came into effect on the date the application was lodged, which was 18 November 2008. Importantly, the TCO does not affect the rights of any person as they stood on the date of registration, nor does it impose any liabilities on any person other than the Commonwealth.
Breaching the provisions of the Customs Act 1901 can lead to various civil and criminal consequences. While specific offences and penalties are not detailed in the explanatory statement, general provisions under the Act may impose penalties for non-compliance. For instance, under section 244 of the Customs Act, a person found guilty of an offence can face a fine of up to $22,200 or imprisonment for up to two years, or both. In cases involving significant breaches or fraudulent activities, the penalties could be more severe. The Act also provides for administrative penalties, including fines and the recovery of unpaid duties and taxes.