EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0919622
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.
Alma Building Pty Ltd applied for a TCO in respect of certain cavity slider on 10 June 2009.
Instrument
TCO No 0919622 was made on 04 September 2009. It declares that those certain cavity slider 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. 0919622 is taken to have come into force on 10 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. 0919622, enacted under the Customs Act 1901, was introduced to provide relief from customs duties for specific goods, thereby addressing the economic barriers faced by businesses that rely on importing certain items not produced domestically. The instrument was created in response to an application by Alma Building Pty Ltd for a tariff concession order concerning certain cavity sliders, which was approved on 4 September 2009. The primary objective of this legislation, as outlined in the Customs Act, is to facilitate the importation of goods that do not have substitutable products produced in Australia, thereby ensuring that businesses can continue their operations without undue financial burden. The instrument was developed by the Chief Executive Officer of Customs, acting under the authority granted by the Australian Parliament. The policy objective is to support economic efficiency and the competitive landscape by reducing the cost of imported goods for businesses.
Scope and Application
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) to be issued by the Chief Executive Officer of Customs (CEO). The application of a TCO, as seen in TCO No. 0919622, applies to specific goods for which a lower rate of customs duty is declared, contingent upon the CEO’s determination that no substitutable goods are produced in Australia. This legislation is primarily concerned with the assessment and approval process for TCOs, ensuring that the application of tariff concessions does not disadvantage existing Australian production or impose liabilities on individuals or entities prior to the registration date. The instrument extends its reach to those directly involved in the importation of the specified goods, benefiting importers by allowing them to apply for refunds of duty paid on those goods since the TCO’s effective date. The geographic and jurisdictional reach of this legislation is national, applying across all states and territories in Australia, as it falls under the purview of the Commonwealth. The Act does not impose any liabilities on persons other than the Commonwealth and is designed to operate without affecting pre-existing rights adversely.
Key Provisions
The main provisions of Tariff Concession Instrument No. 0919622, as explained in the accompanying explanatory statement, pertain to the granting of a Tariff Concession Order (TCO) for certain cavity sliders. Section 269F of the Customs Act 1901 (the Act) allows for an application to be made to the Chief Executive Officer of Customs (the CEO) for a TCO, which would result in a lower rate of customs duty being applied to the specified goods. Section 269C stipulates that the application meets the core criteria if no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Once the CEO is satisfied that these criteria are met, a TCO is issued under section 269P(3), declaring that the specified goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by this legislation on the parties it governs include the requirement for the CEO to assess whether the application for a TCO meets the core criteria, as outlined in section 269C. If the CEO is satisfied that the application is valid and meets the criteria, they must proceed to issue a written order in the form of a TCO. This process ensures that the appropriate tariff concession is applied to the specified goods. Additionally, the CEO is required to publish a notice in the Gazette under subsection 269K(1), inviting any interested parties to submit any reasons why the TCO should not be made. Alma Building Pty Ltd, the applicant in this case, must ensure that their application provides all necessary information and justification for the tariff concession.
Failure to comply with the requirements of the Customs Act 1901 and the associated regulations may result in penalties. While specific penalties are not detailed in the explanatory statement, breaches of the Act or regulations could lead to fines or other enforcement actions under the general provisions of the Act. For instance, section 257 of the Act provides for a maximum penalty of 10,000 penalty units for contraventions of certain sections of the Act. It is also important to note that the TCO does not affect the rights of persons or impose liabilities on any person other than the Commonwealth in respect of anything done or omitted to be done before the date of registration of the TCO.
The commencement of TCO No. 0919622, as per subsection 269S(1), is deemed to be on the day the application for the TCO was lodged, which in this case was 10 June 2009. The TCO benefits importers by allowing them to apply for a refund of duty on goods imported since the date the TCO is taken to have come into force, as stipulated under paragraph 126(1)(r) of the Regulations. This ensures that the tariff concessions are retroactively applicable to imports made from the date of the application.