EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0935339
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.
Steeldrill Workgear Pty Ltd applied for a TCO in respect of certain cleaning wipes on 21 September 2009.
Instrument
TCO No 0935339 was made on 11 December 2009. It declares that those certain cleaning wipes 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. 0935339 is taken to have come into force on 21 September 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, serves as the foundational statute for the regulation of customs in Australia. Among its provisions, Part XVA of the Act establishes a framework for Tariff Concession Orders (TCOs) which can be issued by the Chief Executive Officer of Customs to provide reduced customs duty rates on specified goods. This legislative instrument was introduced to address the need for flexibility in customs duty rates to support certain industries and to encourage the importation of goods that are not produced domestically, thereby fostering competition and economic efficiency. Tariff Concession Order No. 0935339 was enacted to provide a tariff concession for certain cleaning wipes, reflecting the policy objective of reducing the customs duty rate from the general rate of 5% to free, in recognition that no substitutable goods were being produced in Australia at the time of the application. This measure was intended to benefit importers by potentially reducing their duty liabilities on these goods.
Scope and Application
The Tariff Concession Instrument No. 0935339 under the Customs Act 1901 applies to persons or entities seeking tariff concessions for goods that are not produced in Australia and for which no substitutable goods are produced domestically. This instrument was issued by the Chief Executive Officer of Customs and it specifically pertains to certain cleaning wipes, granting them tariff concessions in accordance with item 50 of Schedule 4 to the Customs Tariff Act 1995. The geographic reach of this Act is national, as it applies across Australia in alignment with the overarching Customs Act 1901. The Act does not specify any exclusions or exemptions other than those stipulated in section 269SJ of the Act, which excludes certain goods from tariff concession eligibility. The Act can be further extended or restricted through subordinate instruments, such as the Regulations mentioned, which allow for the application of refunds for duty on imported goods since the date the TCO is deemed to have come into force.
Key Provisions
The main operative sections of this legislation (F2010L01003) pertain to the creation and implementation of a Tariff Concession Order (TCO) under the Customs Act 1901 (section 269C). The legislation allows for the application of a lower rate of customs duty on specified goods (section 269P(3)). Specifically, the TCO, in this case TCO No. 0935339, pertains to certain cleaning wipes and specifies that these goods are subject to a free rate of duty, as opposed to the general rate of 5% (section 269F). The TCO was made on 11 December 2009, and it is deemed to have come into effect on the day the application was lodged, which was 21 September 2009 (subsection 269S(1)).
The Act imposes certain obligations on the Chief Executive Officer of Customs (CEO). Upon receiving a valid TCO application, the CEO must determine whether the application meets the core criteria (section 269C). These criteria include the absence of substitutable goods produced in Australia in the ordinary course of business (section 269D, section 269E, section 269B). If the CEO is satisfied that the application meets these criteria, they must make a written TCO (section 269P(3)). Additionally, the CEO is required to publish a notice in the Gazette, inviting any interested parties to lodge submissions regarding the TCO (subsection 269K(1)). In this instance, the CEO did not receive any submissions in response to the published notice (Consultation).
The legislation does not detail any specific offences, penalties, or consequences for breach of the TCO provisions. However, it is pertinent to note 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 (Commencement). This means that the TCO does not impose any liabilities on any person, and the rights of importers will be beneficially affected. 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 (paragraph 126(1)(r) of the Regulations).