EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0917878
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.
Ingersoll Rand Australia Pty Ltd applied for a TCO in respect of certain hinged door fittings on 27 May 2009.
Instrument
TCO No 0917878 was made on 05 November 2009. It declares that those certain hinged door 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. 3 submissions objecting to the TCO application was received from Assa Abloy Pty Ltd, Anthony Innovations Pty Ltd and Gainsborough Hardware Industries Ltd.
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. 0917878 is taken to have come into force on 27 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, was amended to address the need for a streamlined process for tariff concessions, particularly for imported goods that have no Australian-made equivalents. This legislative change introduced a mechanism under which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to apply lower rates of customs duty on specific imported goods. The explanatory statement outlines that Ingersoll Rand Australia Pty Ltd applied for a TCO on certain hinged door fittings, and following a review process that included public consultation, Tariff Concession Instrument No. 0917878 was issued on 5 November 2009. This instrument declares that the specified hinged door fittings are subject to a free rate of duty, aligning with the policy objective of facilitating trade by reducing duty on non-substitutable imported goods. The TCO is effective from the date the application was lodged, ensuring that the rights of importers are protected and that no existing liabilities are imposed.
Scope and Application
The Tariff Concession Instrument No. 0917878 under the Customs Act 1901 applies to goods that are the subject of a Tariff Concession Order (TCO), specifically certain hinged door fittings. The instrument targets importers and users of these goods by offering them a lower rate of customs duty. This concession applies nationally, as the Customs Act 1901 operates under the Commonwealth jurisdiction, and the instrument is made pursuant to the Act. Any person, including companies such as Ingersoll Rand Australia Pty Ltd, can apply for a TCO if the goods in question are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The instrument does not affect any pre-existing rights or liabilities of persons other than the Commonwealth. The CEO of Customs has the authority to make the TCO if no substitutable goods were produced in Australia on the day the application was lodged. Any objections to the TCO must be lodged with the CEO, as per subsection 269K(1) of the Act, and the TCO comes into effect on the date the application was lodged.
Key Provisions
The main operative sections of this legislation revolve around the establishment and operation of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows for applications to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods. If the application is not in relation to goods that are explicitly excluded under section 269SJ, the CEO must determine whether the application meets the core criteria as outlined in section 269C. This determination hinges on the absence of substitutable goods produced in Australia as stipulated in section 269D and the ordinary course of business as defined in section 269E. If the CEO is satisfied that these conditions are met, a written order declaring the goods eligible for tariff concessions under the Customs Tariff Act 1995 is issued, as per subsection 269P(3).
The Act imposes several obligations on the parties involved. Firstly, applicants such as Ingersoll Rand Australia Pty Ltd must submit a valid application to the CEO, ensuring that it pertains to goods not excluded under section 269SJ and that it meets the core criteria. The CEO, in turn, is obligated to assess the application against these criteria, publish a notice in the Gazette inviting objections, and consider any submissions received, as mandated by subsection 269K(1). Furthermore, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities on any person, as per the provisions under section 269S and paragraph 126(1)(r) of the Regulations.
The legislation also delineates consequences for non-compliance and breaches. Although the specific penalties are not detailed in the explanatory statement, it is implied that failure to comply with the provisions of the Customs Act 1901 and the related regulations could result in civil or criminal consequences. Typically, breaches of customs laws can lead to penalties such as fines or imprisonment, depending on the severity of the offence. Additionally, the TCO itself ensures that the rights of importers are protected and can even entitle them to apply for a refund of duty on goods imported since the TCO came into effect, as per paragraph 126(1)(r) of the Regulations.