EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0843773
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 applied for a TCO in respect of certain ironing boards on 12 December 2008.
Instrument
TCO No 0843773 was made on 06 March 2009. It declares that those certain ironing boards 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. 0843773 is taken to have come into force on 12 December 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. 0843773, made under the Customs Act 1901, was introduced to address the need for tariff concessions for specific goods, in this case certain ironing boards, where no substitutable goods are produced in Australia. Enacted in 2009, this instrument was developed to facilitate the application process as outlined in Part XVA of the Customs Act 1901, allowing the Chief Executive Officer of Customs to grant lower customs duty rates on specified goods if certain conditions are met. The objective of this legislative instrument is to provide tariff relief to importers of these goods by ensuring that no substitutable products are being manufactured domestically, thereby supporting the importation of these specific items without imposing any disadvantage or additional liability on existing stakeholders. This instrument was enacted by the relevant authority as specified in the Customs Act, following a process that included public consultation, which in this instance did not elicit any submissions opposing the tariff concession.
Scope and Application
The Customs Act 1901 provides a framework for the application of Tariff Concession Orders (TCOs) which are designed to offer preferential tariff treatment on certain goods imported into Australia. The Act applies to any person or entity that seeks to import goods that are eligible for a TCO, provided the goods are not specified in section 269SJ as those that cannot be subject to a TCO. The application of a TCO is determined by the Chief Executive Officer of Customs, who must ensure that no substitutable goods are produced in Australia at the time of the application, as per section 269C. The scope of the Act extends to the national level, impacting importers by allowing them to apply for a refund of duty on goods imported since the TCO came into effect, as stipulated under paragraph 126(1)(r) of the Regulations. The Act does not impose any liabilities on any person beyond the Commonwealth and does not affect any existing rights as at the date of registration. The TCO instrument No. 0843773, which was made in respect of certain ironing boards, is an example of how the Act is applied to provide tariff concessions, in this case, by setting the duty rate to free for the specified goods.
Key Provisions
The primary sections of this legislation (sections 269C, 269B, 269E, 269D, 269P(3) and 269K(1)) establish the framework for Tariff Concession Orders (TCOs) under Part XVA of the Customs Act 1901. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application does not pertain to goods specified in section 269SJ, the CEO must determine whether it meets the core criteria outlined in section 269C. These criteria require that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, with definitions for "goods produced in Australia", "ordinary course of business" and "substitutable goods" provided in sections 269D, 269E and 269B, respectively. If the CEO is satisfied that the application meets these criteria, a written TCO is issued under section 269P(3), declaring that the goods in question are subject to a specified item of Schedule 4 of the Customs Tariff Act 1995. Additionally, section 269K(1) mandates that, upon accepting a TCO application as valid, the CEO must publish a notice in the Gazette, inviting submissions from any person who believes the TCO should not be made. This process ensures transparency and allows for public input before a TCO is finalized.
Under this Act, the CEO has specific obligations regarding the processing and assessment of TCO applications. The CEO must first determine the validity of the application by ensuring that it does not pertain to goods listed in section 269SJ, which cannot be subject to a TCO. Next, the CEO must rigorously assess whether the application meets the core criteria outlined in section 269C. This assessment involves verifying that, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for key terms such as "goods produced in Australia", "ordinary course of business" and "substitutable goods" are provided in sections 269D, 269E and 269B, respectively. If the application meets these criteria, the CEO is required to issue a written TCO under section 269P(3), specifying the applicable item from Schedule 4 of the Customs Tariff Act 1995. Furthermore, the CEO must publish a notice in the Gazette, as per section 269K(1), inviting submissions from the public and ensuring that the process is transparent and inclusive.
Failure to comply with the requirements and obligations outlined in this Act may result in legal consequences. Although specific offences, penalties, or consequences for breach are not detailed within the provided text, it is implied that non-compliance could lead to the invalidation of the TCO or other administrative actions. The Act’s emphasis on transparency and public consultation suggests that breaches might be subject to scrutiny, potentially leading to civil or administrative penalties. For instance, if the CEO fails to properly assess an application or does not adequately consider public submissions, this could result in the TCO being overturned or not issued, affecting the rights of the applicant and potentially leading to financial losses for the entity involved.
The commencement date of a TCO is specified to be the day on which the application for the TCO was lodged, as per subsection 269S(1). This means that the TCO is effective from the date the application was submitted, providing immediate benefits to the rights of importers, who can apply for a refund of duty on goods imported since this effective date under paragraph 126(1)(r) of the Regulations. Importantly, the Act ensures that the TCO does not impose any liabilities on any person other than the Commonwealth, nor does it disadvantage any person by affecting their rights as they stood on the date of registration. This protects stakeholders from any retroactive liabilities or disadvantages that might arise from the issuance of a TCO.