EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0902063
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.
Gempro Pty Ltd applied for a TCO in respect of certain handrail fittings on 21 January 2009.
Instrument
TCO No 0902063 was made on 17 April 2009. It declares that those certain handrail 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. 0902063 is taken to have come into force on 21 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 Customs Act 1901 was enacted to provide a framework for the regulation of imports and exports in Australia, including the imposition of customs duties. Part XVA of the Act establishes a scheme whereby Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs, allowing for lower rates of customs duty on specified goods. Enacted by the Parliament of Australia, the purpose of this legislation is to facilitate trade by reducing the cost of imported goods, provided that no substitutable goods are produced in Australia. This aims to encourage the import of goods that are not domestically manufactured, thereby supporting market competition and potentially lowering consumer prices. Instrument No. 0902063, made under this Act on 17 April 2009, provides a tariff concession for certain handrail fittings, reducing the duty rate from 5% to free, effective from 21 January 2009.
Scope and Application
The Customs Act 1901, specifically under Part XVA, authorises the Chief Executive Officer of Customs (CEO) to issue Tariff Concession Orders (TCO) that reduce customs duty on certain goods. These orders apply to specific goods that are not produced in Australia and for which no substitutable goods are produced domestically. When an entity such as Gempro Pty Ltd applies for a TCO, the CEO assesses whether the application meets the core criteria outlined in sections 269C, 269D, and 269E of the Act. If the application is approved, the CEO issues a written order specifying the reduced customs duty rate applicable to the goods in question. The application process also involves publishing a notice in the Gazette to allow for any objections, though in the case of TCO No. 0902063, no submissions were received. The TCO has retrospective effect from the date of application, providing relief to importers who can apply for duty refunds for imports made since that date, without imposing any new liabilities on third parties.
Key Provisions
The primary operative sections of this legislation, Tariff Concession Instrument No. 0902063, revolve around the granting of Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901. Section 269C requires the Chief Executive Officer of Customs (CEO) to assess whether the application for a TCO meets the core criteria. Specifically, section 269P(3) mandates that the CEO must make a TCO if satisfied that the application meets these criteria, which include ensuring no substitutable goods are produced in Australia on the day the application is lodged. In this instance, the TCO No. 0902063 was made on 17 April 2009, declaring that certain handrail fittings are subject to a zero percent duty rate as per item 50 of Schedule 4 to the Customs Tariff Act 1995, given the absence of substitutable goods produced in Australia.
The obligations imposed by this Act primarily rest with the CEO of Customs, who must evaluate applications for TCOs and decide whether they meet the core criteria specified in section 269C. Once an application is accepted as valid, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting submissions from any interested parties. The CEO must also ensure that the TCO does not disadvantage any person or impose liabilities on any person in respect of anything done or omitted before the TCO's registration date. This is outlined in subsection 269S(1), which specifies that a TCO is deemed to come into force on the day the application is lodged.
The consequences for non-compliance with the Act are not explicitly detailed in the explanatory statement. However, breaches of the Customs Act 1901 can generally lead to both civil and criminal penalties, including fines and imprisonment, depending on the severity of the violation. For instance, under section 256 of the Customs Act, an offence involving fraud or knowingly making a false statement can result in a maximum penalty of five years' imprisonment or significant fines. While the specific penalties for breaches related to TCOs are not mentioned, they likely fall within the scope of these general penalties for violations of the Customs Act.