EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0939174
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.
Hill Industries applied for a TCO in respect of certain garden bed frames on 19 October 2009.
Instrument
TCO No 0939174 was made on 30 December 2009. It declares that those certain garden bed frames 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. 0939174 is taken to have come into force on 19 October 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, provides a framework for the administration of customs and excise in Australia. The Act includes provisions for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which aim to facilitate trade by providing tariff concessions on certain goods. These concessions are intended to benefit importers by reducing the customs duty payable on specific goods, provided certain criteria are met, such as the absence of substitutable goods produced in Australia. The Tariff Concession Instrument No. 0939174, made under the authority of the Customs Act, specifically addresses the application by Hill Industries for a TCO on certain garden bed frames. The instrument declares that these garden bed frames are subject to a free rate of duty, as no substitutable goods were produced in Australia at the time of the application. This measure is designed to support the importation of these goods by lowering the associated customs duty, thereby enhancing the competitive position of the products in the Australian market.
Scope and Application
The Customs Act 1901, through its Part XVA, establishes a framework under which the Chief Executive Officer of Customs (CEO) can issue Tariff Concession Orders (TCO) that apply lower rates of customs duty on specified goods. This legislation applies to any person or entity seeking a concession on the duty payable on imported goods, provided the goods do not fall under the category of items explicitly excluded from TCO consideration as per section 269SJ of the Act. The geographic scope of this legislation is national, as it pertains to the federal jurisdiction of the Australian Customs Service. The CEO's decision to issue a TCO is contingent upon the absence of substitutable goods produced in Australia at the time of the application, as outlined in sections 269C and 269D of the Act. Once a TCO is issued, it applies retroactively from the date the application was lodged, and while it benefits importers by potentially reducing duty rates, it does not impose any liabilities on individuals or entities for actions taken prior to the issuance of the order.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 0939174, which is made under the Customs Act 1901, include sections 269C (3) and 269P(3) (subsection 269K(1) is also relevant). Section 269C(3) mandates that a Tariff Concession Order (TCO) 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. Section 269P(3) requires that if the Chief Executive Officer (CEO) of Customs is satisfied that an application meets these criteria, a written order must be made declaring that the goods specified in the application are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This particular TCO, which was made on 30 December 2009, applies to certain garden bed frames and declares that these goods are subject to item 50 of Schedule 4, which imposes a duty rate of free, as opposed to the general rate of 5%.
The Customs Act 1901 imposes several obligations on parties involved with TCOs. Firstly, the CEO is required to assess whether a TCO application meets the core criteria by verifying that no substitutable goods were produced in Australia in the ordinary course of business. Secondly, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per section 269K(1). This notice must be published as soon as practicable after accepting the application as valid. Lastly, if the CEO decides to proceed with the TCO, they must make a written order declaring that the goods specified in the application are subject to the relevant tariff concession.
In terms of breaches and penalties, the Customs Act 1901 does not explicitly detail specific offences, penalties, or civil/criminal consequences for non-compliance with the TCO provisions. However, general provisions within the Customs Act 1901 and related legislation might apply, such as penalties for providing false or misleading information during the application process. The act and associated regulations typically include provisions for fines and other penalties for non-compliance, which could be enforced by the CEO or other relevant authorities. The precise penalties would depend on the specific nature of the breach and could include significant fines, imprisonment, or both, as stipulated in other sections of the Customs Act 1901 and related legislation.