EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0900748
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.
Sasgar applied for a TCO in respect of certain fire fighting hose reel on 14 January 2009.
Instrument
TCO No 0900748 was made on 03 April 2009. It declares that those certain fire fighting hose reel 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. 0900748 is taken to have come into force on 14 January 2009.
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. 0900748 was enacted in 2009 under the Customs Act 1901 to address the need for reduced customs duties on specific imported goods, in this case, certain fire fighting hose reels, where there is no domestic production of substitutable goods. The instrument was introduced to provide a concession in the form of a Tariff Concession Order (TCO) that lowers the customs duty rate from the general 5% to a duty-free status. This legislative measure was developed by the Chief Executive Officer of Customs, following an application by Sasgar, and aims to facilitate the importation of these essential goods without financial barriers. The decision to grant the concession was made after confirming that no substitutable goods were produced in Australia at the time of the application, aligning with the policy objective of the Customs Act to support the importation of necessary goods when domestic alternatives are not available.
Scope and Application
The Customs Act 1901, through Part XVA, provides a framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). This Act applies to any person who may apply to the CEO for a TCO in respect of goods, provided that the goods are not specified in section 269SJ of the Act, which excludes certain types of goods from being subject to a TCO. A TCO application meets the core criteria if, on the date the application was lodged, there were no substitutable goods produced in Australia in the ordinary course of business, as defined by sections 269D and 269E. If the CEO determines that the application meets these criteria, they must issue a written order specifying that the goods in question are subject to a lower rate of customs duty as outlined in Schedule 4 of the Customs Tariff Act 1995. The TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration, and it does not impose any liabilities on any person. The TCO No. 0900748, for instance, was made on 3 April 2009, and it applies to certain fire fighting hose reels, setting the duty rate at free, down from the general rate of 5%.
Key Provisions
The key provisions of the Customs Act 1901 as they relate to Tariff Concession Orders (TCOs) are set out in Part XVA. Section 269F (1) allows any person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning certain goods. If the CEO is satisfied that the application pertains to goods that are not specified in section 269SJ of the Act, they must determine if the application meets the core criteria set out in section 269C. A TCO application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO is satisfied that the application meets these criteria, they must issue a written order under section 269P(3) declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties applying for a TCO are primarily centered around the submission of a valid application to the CEO and the provision of any necessary information or documentation. The CEO, in turn, has the obligation to review the application, determine if it meets the core criteria, and if so, to issue a TCO. The CEO must also ensure that a notice is published in the Gazette inviting any interested party to lodge a submission if they believe there are reasons why the TCO should not be made, as stipulated in section 269K(1) of the Act. The CEO must consider any submissions received before making the final decision on the TCO application.
In terms of consequences for breach, the Act does not explicitly outline offences or penalties for non-compliance with the TCO provisions. However, any failure to adhere to the conditions set out in a TCO or to comply with the obligations of the Act and its regulations could potentially lead to disputes or legal action. Importers who have already paid duty on goods that later become subject to a TCO may be able to apply for a refund under paragraph 126(1)(r) of the Regulations. The TCO itself does not impose any new liabilities on any person, nor does it affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken prior to the registration date.