EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0918688
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.
ED Oates Pty Ltd applied for a TCO in respect of certain wringer mop buckets on 28 May 2009.
Instrument
TCO No 0918688 was made on 21 August 2009. It declares that those certain wringer mop buckets 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. 0918688 is taken to have come into force on 28 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 Parliament of Australia, provides a framework under which Tariff Concession Orders (TCOs) can be issued to lower the rate of customs duty on certain goods. This legislative instrument addresses the gap in providing tariff relief to importers of goods that are not produced in Australia and for which no suitable substitute is available domestically. In particular, the Customs Act 1901 allows the Chief Executive Officer of Customs to make a TCO if no substitutable goods are produced in Australia. The policy objective is to ensure that importers are not unduly burdened by customs duties on goods that are not domestically produced and for which no local alternative exists, thereby supporting trade and economic efficiency.
Scope and Application
The Customs Act 1901, through Part XVA, establishes a framework for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any individual or entity that seeks a tariff concession for goods imported into Australia, provided the goods in question are not listed in section 269SJ, which specifies the types of goods that are ineligible for a TCO. The Act's jurisdiction extends across the Commonwealth of Australia, and its application is not limited to a specific geographic area or industry. The Act's provisions are enforced nationally, and its scope encompasses any goods that are subject to a TCO application. The Act allows for the application to be extended or restricted through subordinate instruments, although such extensions or restrictions must comply with the core criteria outlined in section 269C. The Explanatory Statement for Tariff Concession Instrument No. 0918688 demonstrates this process, detailing the application by ED Oates Pty Ltd for wringer mop buckets, which was subsequently approved by the CEO of Customs.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0918688 under the Customs Act 1901 include sections 269C, 269B, 269D, 269E, 269F, and 269P, which detail the criteria for the application and approval of Tariff Concession Orders (TCOs). Section 269C specifies that a TCO application meets the core criteria if, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, while section 269P(3) mandates the CEO to make a written order (a TCO) if the application meets the core criteria. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made.
The obligations imposed by the Act on the parties or entities it governs include the requirement for the CEO to assess TCO applications against the core criteria outlined in section 269C. This involves determining whether the goods specified in the application have substitutable goods produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid, inviting any interested parties to lodge submissions. If no submissions are received, the CEO proceeds with the approval process. Once approved, the TCO comes into force on the day the application was lodged, as stipulated in subsection 269S(1). This instrument ensures that the rights of importers are beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into force.
Under the Customs Act 1901, there are no specific offences or penalties outlined in the Act itself for breaches related to the approval or implementation of a Tariff Concession Order. However, general provisions within the Customs Act may apply for non-compliance with customs regulations. The instrument itself does not specify penalties for breaches but highlights that 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. This means that the TCO does not impose any new liabilities on any person, ensuring that the rights of importers are protected and they can benefit from the concessions provided.