EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0907367
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.
Sheldon And Hammond applied for a TCO in respect of certain cast iron cookware on 03 March 2009.
Instrument
TCO No 0907367 was made on 22 May 2009. It declares that those certain cast iron cookware 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. 0907367 is taken to have come into force on 03 March 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 for the regulation of customs and excise in Australia. The Act allows for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs, which can apply reduced rates of customs duty to certain goods. This mechanism was introduced to address the need for economic incentives and tariff reductions that encourage the importation of specific goods, particularly where there are no Australian-made alternatives. The Tariff Concession Instrument No. 0907367, issued in 2009, is a specific example of this process where a TCO was granted for certain cast iron cookware, reducing the customs duty rate from 5% to free. This instrument was created following an application by Sheldon And Hammond, and after the CEO confirmed that no substitutable goods were produced in Australia, fulfilling the core criteria set out in section 269C of the Customs Act. The policy objective in this case is to facilitate the import of these goods without imposing any new liabilities on importers or disadvantaging existing rights.
Scope and Application
The Customs Act 1901, specifically Part XVA, allows for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs to apply lower rates of customs duty on certain goods. The Act applies to any person who may apply to the CEO for a TCO concerning goods that are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The CEO's decision to grant a TCO is contingent upon the absence of substitutable goods produced in Australia at the time the application is lodged, as per section 269C of the Act. If the CEO determines that a TCO application meets the core criteria, a written order is issued, effectively applying a prescribed tariff concession to the goods specified in the application. The geographic reach of this legislation is national, applying across Australia, as it pertains to customs duties and imports. The legislation does not impose any liabilities on any person, including importers or other stakeholders, and does not disadvantage any person's rights as at the date of registration of the TCO. The TCO in question, TCO No. 0907367, applies to certain cast iron cookware and came into effect on 3 March 2009, the date on which the application was lodged.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0907367 under the Customs Act 1901 (section 269C) establish the criteria for making a Tariff Concession Order (TCO), which allows for a lower rate of customs duty on certain goods. The CEO of Customs must ensure that the goods in question are not substitutable by any goods produced in Australia in the ordinary course of business (section 269D and 269E). If these criteria are met, the CEO must make a written order (section 269P(3)). In this specific case, the TCO No. 0907367 was issued for certain cast iron cookware, with a general duty rate of 5% being reduced to free duty.
The Act imposes several obligations on the parties involved. The CEO of Customs must rigorously evaluate the TCO application to ensure it meets the core criteria set out in the Act. This involves determining whether the goods in question are not substitutable by any goods produced in Australia (section 269SJ). Additionally, the CEO must publish a notice in the Gazette inviting any person to lodge submissions if they believe there are reasons why the TCO should not be made (section 269K(1)). For Sheldon And Hammond, this means ensuring their application complies with the statutory criteria and responding to any inquiries or submissions from the CEO.
Failure to comply with the requirements of the Act can result in various consequences. If the CEO finds that the criteria for a TCO are not met, the application will not be granted. The Act does not specify particular offences or penalties for failing to comply with the Act, but any misuse or misrepresentation in the application process could lead to further scrutiny or legal action. In the event of non-compliance, the CEO has the authority to deny the TCO and may refer the matter to appropriate authorities for further investigation.
The TCO No. 0907367 does not disadvantage any person other than the Commonwealth and does not impose any new liabilities on individuals or entities (section 126(1)(r)). Instead, it provides beneficial rights to importers, allowing them to apply for a refund of duty on goods imported since the effective date of the TCO. This ensures that the concession applies retroactively from the date the application was lodged, thereby protecting the interests of importers and providing clarity regarding duty obligations.