EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917345
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.
FBA Imports applied for a TCO in respect of certain trolley bins on 22 May 2009.
Instrument
TCO No 0917345 was made on 14 August 2009. It declares that those certain trolley bins 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. 0917345 is taken to have come into force on 22 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, includes provisions for Tariff Concession Orders (TCOs) to provide relief on customs duties for certain goods under specific circumstances. This legislation was introduced to address the need for flexible tariff arrangements that could cater to unique economic situations or the introduction of new products into the market. The objective, as stated in the Act, is to enable the Chief Executive Officer of Customs to make TCOs that apply a lower rate of customs duty on goods, provided they meet certain criteria such as the absence of substitutable goods produced in Australia. The process for making a TCO involves an application by an interested party, followed by a decision by the CEO based on the core criteria outlined in the Act. This mechanism allows for a streamlined and responsive approach to tariff adjustments, aiming to support industry and commerce without imposing new liabilities on entities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). This legislative instrument is designed to allow for reduced customs duties on specific goods, provided certain criteria are met. The Act applies to individuals or entities seeking tariff concessions for goods not produced domestically and where no substitutable goods are manufactured within Australia. The geographic reach of this Act is national, extending across the Commonwealth of Australia. Exclusions from this concession are outlined in section 269SJ of the Act, which specifies goods that are ineligible for a TCO. The application process involves submitting an application to the CEO, who assesses it against the core criteria, including the absence of domestic production of substitutable goods. If satisfied, the CEO issues a written TCO, specifying the reduced duty applicable to the goods in question. The TCO is effective from the date the application is lodged, as per section 269S(1) of the Act. Notably, this instrument does not retroactively affect existing rights or impose new liabilities on entities other than the Commonwealth. Instead, it provides prospective benefits, such as the potential for duty refunds on goods imported after the TCO’s effective date.
Key Provisions
The main operative sections of this legislation include sections 269C, 269B, 269D, 269E, 269F, 269K, 269P, 269S, and 269SJ of the Customs Act 1901 (the Act). Section 269F allows an individual to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods. If the application meets the core criteria specified in section 269C, the CEO must make a written order, which is the TCO, as detailed in section 269P. Section 269K requires the CEO to publish a notice in the Gazette inviting submissions if the application is accepted as valid. Section 269SJ outlines the goods that cannot be subject to a TCO. The TCOs come into force on the day the application was lodged as per section 269S.
The Act imposes several obligations on the parties involved. Firstly, section 269C requires the CEO to determine whether the application for a TCO meets the core criteria. This involves assessing whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the application meets these criteria, the CEO must then make a written TCO as per section 269P. Section 269K also requires the CEO to publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to lodge submissions. Additionally, section 269SJ restricts the types of goods that can be subject to a TCO.
Failure to comply with the requirements set out in the Act may result in various consequences. While specific offences and penalties are not detailed in the Explanatory Statement, it is implied that non-compliance with the Act's provisions could lead to legal action. For example, if an entity makes a false or misleading application for a TCO, this could potentially be considered an offence under the Customs Act 1901 or related legislation. The penalties for such offences could include fines and, in some cases, imprisonment. However, the maximum penalties are not specified within the explanatory statement provided.
The Tariff Concession Order No. 0917345, which was made on 14 August 2009, declares that certain trolley bins are goods to which a specific item of Schedule 4 to the Tariff applies, with a duty rate of free instead of the general rate of 5%. The TCO came into force on 22 May 2009, the day the application was lodged, as per section 269S of the Act. This means that importers of these trolley bins can now benefit from the concessional rate of duty and may be eligible to apply for a refund of duty on goods imported since that date under paragraph 126(1)(r) of the Regulations. Importantly, the TCO does not impose any liabilities on any person and does not affect the rights of a person as at the date of registration, except to beneficially affect the rights of importers.