EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917659
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.
Rubys Closet applied for a TCO in respect of certain steel hanger separators on 25 May 2009.
Instrument
TCO No 0917659 was made on 14 August 2009. It declares that those certain steel hanger separators 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. 0917659 is taken to have come into force on 25 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 Tariff Concession Instrument No. 0917659 was introduced under the Customs Act 1901 to address the need for a streamlined process in granting tariff concessions on specific goods. This instrument was enacted in 2009 by the Chief Executive Officer of Customs in response to an application by Rubys Closet for a tariff concession order (TCO) on certain steel hanger separators. The Customs Act 1901 established a framework whereby TCOs could be issued to apply a lower rate of customs duty on specified goods, provided that certain criteria were met, such as the absence of substitutable goods produced in Australia. The policy objective of this instrument is to facilitate the importation of goods by reducing the customs duty burden on those goods, thereby promoting trade and economic efficiency. The instrument came into effect on the date the application was lodged, 25 May 2009, and does not affect the rights of persons other than the Commonwealth or impose liabilities on them in respect of actions taken prior to the registration of the TCO.
Scope and Application
The Customs Act 1901, specifically Part XVA, provides a framework for the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCO) which apply lower rates of customs duty to certain goods. This applies to any person or entity seeking to import specified goods, provided these goods are not explicitly excluded under section 269SJ. The Act has a national reach across Australia, administered by the Commonwealth. The TCOs are subject to certain conditions, such as the absence of substitutable goods being produced in Australia at the time of application, as defined in sections 269C, 269D, and 269E. For instance, TCO No. 0917659, made on 14 August 2009, reduced the duty on certain steel hanger separators to zero, as no substitutable goods were being produced in Australia. This instrument came into force on 25 May 2009, the date of application, without retroactively affecting any pre-existing rights or imposing new liabilities. The process includes a public consultation period where objections can be lodged, although in this instance, no objections were received.
Key Provisions
The primary sections of this legislation (section 269C, 269F, 269P) establish the framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). An application for a TCO (section 269F) must be lodged with the CEO for goods not specified in section 269SJ of the Customs Act 1901. If the CEO determines that the application meets the core criteria outlined in section 269C, which includes the absence of substitutable goods produced in Australia, they are mandated to issue a TCO. This order (section 269P) declares that the specified goods are subject to a prescribed tariff item in the Customs Tariff Act 1995, effectively applying a lower customs duty rate or making the goods duty-free.
The obligations imposed by this Act on the parties involved primarily revolve around the application and assessment process for TCOs. The CEO has the responsibility to evaluate each application against the core criteria, ensuring that no substitutable goods are produced in Australia and that the goods in question are not restricted by section 269SJ. The applicant, such as Rubys Closet in this instance, must provide sufficient information to support their application and meet the eligibility requirements. Additionally, the CEO is obligated to publish a notice in the Gazette (subsection 269K(1)) inviting public submissions on the proposed TCO, although in this case, no submissions were received.
In terms of legal consequences, the Customs Act 1901 does not explicitly outline offences, penalties, or civil/criminal consequences for breaches related to the TCO process itself. However, any misuse or fraudulent activity related to the customs duty process generally may incur penalties under other sections of the Customs Act, which can include fines and imprisonment. It is important to note that the TCO does not affect the rights of any person as at the date of registration and does not impose liabilities on individuals or entities other than the Commonwealth, ensuring that existing rights and obligations remain unaffected by the issuance of the TCO.