EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0841118
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.
Hills Industries Pty Ltd applied for a TCO in respect of certain aluminium screen doors on 25 November 2008.
Instrument
TCO No 0841118 was made on 27 February 2009. It declares that those certain aluminium screen doors 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. 0841118 is taken to have come into force on 25 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 was enacted to facilitate the regulation of customs and excise duties, among other things. The Tariff Concession Instrument No. 0841118 was introduced in 2009 by the Commonwealth Government to address the need for tariff concessions on specific goods. This instrument allows for the reduction or elimination of customs duty on goods that are not produced domestically and for which there are no suitable substitutes available in Australia. The Tariff Concession Order (TCO) process is overseen by the Chief Executive Officer of Customs, who is mandated to consider applications and determine whether they meet the core criteria outlined in the Act. The objective of this instrument is to ensure that the application of tariff concessions does not disadvantage existing producers or impose liabilities on individuals prior to the implementation of the concession. The TCO in question benefits importers by potentially allowing them to apply for a refund of duties on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0841118, enacted under the Customs Act 1901, applies to individuals or entities seeking tariff concessions for specific goods imported into Australia. The legislation provides a framework through which the Chief Executive Officer of Customs can grant concessions, lowering the customs duty on certain goods if no substitutable goods are produced in Australia. This Act specifically applies to applications for tariff concession orders (TCOs) and the subsequent granting of these orders, ensuring that the concessions are only applicable to goods that meet the core criteria as outlined in the Act. The instrument applies nationally across Australia, as it falls under the Commonwealth jurisdiction. Importantly, the Act does not apply to goods specified in section 269SJ, which cannot be subject to a TCO. The Act's scope can be extended or further defined through subordinate instruments, but no such extensions or restrictions are noted in this particular instance.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0841118 under the Customs Act 1901 (sections 269C, 269B, 269D, 269E, and 269P) outline the criteria and process for making a Tariff Concession Order (TCO). These sections detail the conditions under which a TCO can be applied for and granted, specifically regarding the production of substitutable goods in Australia and the ordinary course of business. Section 269C states that if no substitutable goods are produced in Australia in the ordinary course of business on the day the application was lodged, the application meets the core criteria. This is further defined by sections 269B, 269D, and 269E, which clarify the meanings of 'goods produced in Australia', 'ordinary course of business', and'substitutable goods' respectively. Once the Chief Executive Officer (CEO) of Customs is satisfied that these criteria are met, they must make a TCO as outlined in section 269P(3).
The obligations imposed by this Act on parties such as Hills Industries Pty Ltd, who applied for the TCO, include the responsibility to ensure that their application is complete and meets the criteria set out in the Act. The CEO, on receiving a valid application, must follow the process of publishing a notice in the Gazette (subsection 269K(1)) to invite submissions from any interested parties and consider these before making a decision. In this case, since no submissions were received, the CEO proceeded to make the TCO, which declares that the aluminium screen doors are subject to a free duty rate under item 50 of Schedule 4 to the Customs Tariff Act 1995.
The Act does not explicitly state any offences or penalties for breaches in this context, but it does outline the consequences of not meeting the core criteria. If an application does not meet the criteria, the CEO is not required to make a TCO, and the applicant would not receive the tariff concession. Additionally, section 269S(1) stipulates that the TCO applies from the date the application was lodged, ensuring that no person (other than the Commonwealth) is disadvantaged or imposed with liabilities for actions taken before the TCO is registered. This means that any importer who has already paid duty on the goods can apply for a refund under paragraph 126(1)(r) of the Regulations.