EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917012
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.
Aldi Stores applied for a TCO in respect of certain floor tiles on 19 May 2009.
Instrument
TCO No 0917012 was made on 07 August 2009. It declares that those certain floor tiles 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. 0917012 is taken to have come into force on 19 May 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, enacted by the Australian Parliament, establishes a framework for the administration of customs duties, including the ability to apply for tariff concession orders (TCOs) to provide relief from customs duty for specific goods. The Tariff Concession Instrument No. 0917012, made under this Act, addresses the problem of ensuring that tariff concessions are granted appropriately by the Chief Executive Officer of Customs, in this case for certain floor tiles applied for by Aldi Stores. This instrument was introduced to provide a lower rate of customs duty on these goods, free of charge, provided no substitutable goods were produced in Australia at the time of application. The policy objective is to facilitate trade by reducing the cost of importing certain goods, thereby benefiting importers who can apply for duty refunds for goods imported since the TCO was deemed to come into force on 19 May 2009.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework within which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs (CEO). These orders apply to specific goods for which an application has been made and approved, granting a lower rate of customs duty. This mechanism is particularly relevant for businesses seeking to import goods that do not have Australian-made substitutes, thereby promoting competitive import practices. The Act applies to any person or entity that meets the criteria for a TCO, specifically those whose goods are not listed in section 269SJ, which excludes certain goods from TCO eligibility. Geographically, the Act operates under the Commonwealth jurisdiction, affecting all importers across Australia. The CEO must ensure that no substitutable goods are produced in Australia on the date the application is lodged, as per sections 269C and 269S of the Act. Any TCOs made under this Act do not affect the rights of any person as at the date of registration and do not impose liabilities on any person, though they do confer benefits such as duty refunds for importers of the specified goods.
Key Provisions
The Tariff Concession Instrument No. 0917012 is a specific order made under the Customs Act 1901, which applies a lower rate of customs duty to certain floor tiles, reducing the general rate of 5% to free duty. This order was issued following an application from Aldi Stores on 19 May 2009. According to the Act, the Chief Executive Officer of Customs (CEO) must consider whether the application meets the core criteria set out in section 269C, which includes the requirement that no substitutable goods are produced in Australia on the day the application was lodged (section 269F). If the CEO is satisfied that these criteria are met, they must make a written order, known as a Tariff Concession Order (TCO), declaring that the goods in question are subject to a specified rate of duty as outlined in Schedule 4 of the Customs Tariff Act 1995 (section 269P(3)).
The Act imposes certain obligations on the CEO regarding the process of considering and approving TCO applications. Under section 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting an application as valid, inviting any interested parties to submit any objections to the making of the TCO. In the case of TCO No. 0917012, no submissions were received in response to this invitation. Once a TCO is issued, it is deemed to have come into force on the date the application was lodged, as specified in section 269S(1) of the Act. This means that for TCO No. 0917012, the concessional duty rate has been effective since 19 May 2009.
The TCO does not adversely affect the rights of any person other than the Commonwealth, as stipulated in section 269S(3) of the Act. Specifically, it does not disadvantage any person or impose any liabilities on anyone in respect of actions taken before the date of registration. Importers of the affected goods can benefit from this order by applying for a refund of duty on goods imported since the TCO came into force, under paragraph 126(1)(r) of the Regulations.
There are no explicit offences or penalties outlined in the provided text for breaching the conditions of a TCO. However, any failure to comply with the requirements of the Customs Act 1901 or the associated regulations could potentially lead to legal consequences. For instance, deliberately misapplying a TCO could be considered an offence under the broader provisions of the Customs Act, which might result in criminal charges, fines, or imprisonment depending on the severity of the breach. Civil penalties could also apply for non-compliance, including financial penalties and the requirement to pay any unpaid duties or taxes.