EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919014
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.
Honeywell Pty Ltd applied for a TCO in respect of certain fire alarm system detector bases on 05 June 2009.
Instrument
TCO No 0919014 was made on 28 August 2009. It declares that those certain fire alarm system detector bases 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. 0919014 is taken to have come into force on 05 June 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. 0919014 was enacted under the Customs Act 1901, addressing the need to facilitate the importation of specific goods by reducing the applicable customs duty. This instrument was introduced to provide tariff concessions for certain goods, thereby promoting economic efficiency and supporting industry sectors by making imported goods more affordable. The instrument was developed following an application by Honeywell Pty Ltd for tariff concessions on certain fire alarm system detector bases, which were granted by the Chief Executive Officer of Customs (CEO) upon finding that no substitutable goods were produced in Australia. The instrument’s policy objective is to encourage the importation of goods that are not domestically produced, thus benefiting importers who can now claim refunds for duties paid on these goods since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0919014, made under the Customs Act 1901, pertains to the application of tariff concessions for specific goods, in this case, certain fire alarm system detector bases. The Act applies to any person or entity that imports or seeks to import the specified goods, granting them a concession in the form of a lower rate of customs duty. This concession is applicable to goods that meet the core criteria outlined in section 269C of the Act, which essentially requires that no substitutable goods are produced in Australia in the ordinary course of business at the time the application for the concession was lodged. The scope of this legislation extends to the entire Commonwealth of Australia, meaning it applies nationally. There are no stated exclusions or exemptions within the provided text, though it is noted that certain goods specified in section 269SJ of the Act are ineligible for tariff concessions. The instrument itself extends the application of the Act through subordinate legislation, specifically by detailing the circumstances under which the tariff concession applies to the specified goods. The commencement of the TCO is effective from the date the application was lodged, which in this case was 05 June 2009.
Key Provisions
The primary operative sections of the Tariff Concession Instrument No. 0919014 under the Customs Act 1901 (section 269P(3)) require the Chief Executive Officer (CEO) of Customs to issue a written order, known as a Tariff Concession Order (TCO), when satisfied that an application for a TCO meets the core criteria. Specifically, if the CEO determines that no substitutable goods were produced in Australia on the day the application was lodged, the CEO must issue a TCO. This is outlined in section 269C, which stipulates that a TCO application meets the core criteria if, on the application day, no substitutable goods were produced in Australia in the ordinary course of business. The TCO then applies a lower rate of customs duty, or in some cases, a free rate, to the goods specified in the order.
The obligations imposed by the Act on parties or entities it governs include the requirement for the CEO to evaluate TCO applications based on the core criteria. This involves assessing whether substitutable goods were produced in Australia on the day of application. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made, as stipulated in subsection 269K(1). In the case of TCO No. 0919014, the CEO published such a notice on 5 June 2009 but did not receive any submissions in response. Additionally, the TCO must be taken to have come into force on the day the application was lodged, as outlined in subsection 269S(1).
There are no explicit offences or penalties mentioned in the explanatory statement for failing to comply with the requirements of the TCO or the Act. However, the Act generally provides for potential civil or criminal consequences for breaches, although specific penalties are not detailed in this particular explanatory statement. The focus of the Act is on the procedural correctness of the TCO application process and the duty reduction for eligible goods, rather than penalising non-compliance. The instrument ensures that the rights of importers will be beneficially affected, and that the TCO does not impose any liabilities on any person in respect of actions taken before the TCO's effective date.