EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0940329
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.
Woolworths Ltd applied for a TCO in respect of certain warehouse distribution system lift drum on 26 October 2009.
Instrument
TCO No 0940329 was made on 15 January 2010. It declares that those certain warehouse distribution system lift drum 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. 0940329 is taken to have come into force on 26 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 Tariff Concession Instrument No. 0940329 was enacted under the Customs Act 1901 to address the need for tariff concessions on certain goods, in this case, a warehouse distribution system lift drum, which was applied for by Woolworths Ltd on 26 October 2009. This legislation was designed to provide a lower rate of customs duty on goods specified in a Tariff Concession Order (TCO), thereby promoting competitive pricing and enhancing economic efficiency. The Chief Executive Officer of Customs (CEO) was responsible for evaluating the application against the core criteria, ensuring that no substitutable goods were produced in Australia, and subsequently making the written order which took effect from the date of the application. The CEO's decision was based on the absence of submissions opposing the order, indicating a general acceptance of the tariff concession. This legislative instrument aims to streamline the customs process and foster a more competitive market by reducing the financial burden on importers.
Scope and Application
The Customs Act 1901, through Part XVA, allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders apply to specific goods for which a lower rate of customs duty is applicable, contingent on the goods not being produced in Australia in the ordinary course of business and not being among those specified in section 269SJ of the Act that cannot be subject to a TCO. The legislation applies to any person who applies for such a concession, and the geographic reach of this Act is national, as it is a Commonwealth Act. The application process involves satisfying the core criteria outlined in sections 269C and 269P of the Act, which include ensuring no substitutable goods are produced in Australia on the application date. The Act does not specify exclusions or thresholds but requires public consultation via a Gazette notice to allow for submissions opposing the concession before it is granted. The commencement of a TCO is effective from the date the application is lodged, and it does not retroactively affect the rights of any person, ensuring no disadvantages or liabilities are imposed on individuals for actions taken before the concession is registered.
Key Provisions
The primary sections of the Customs Act 1901 that govern Tariff Concession Orders (TCOs) include section 269F (subsection 269F(1)) which outlines the application process for a TCO, section 269C which defines the core criteria that must be met for an application to be approved, and section 269P(3) which details the requirements for the CEO to issue a TCO if the application satisfies the core criteria (subsection 269P(3)). Section 269SJ specifies the types of goods that cannot be subject to a TCO, while section 269S(1) clarifies that a TCO is deemed to take effect from the date the application is lodged. Section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions on the application, and section 269D, section 269E, and section 269F provide definitions for terms such as "goods produced in Australia," "ordinary course of business," and "substitutable goods" respectively.
The Act imposes several obligations on the parties involved. For example, an applicant for a TCO must ensure their application adheres to the criteria specified in section 269C, which involves demonstrating that no substitutable goods are produced in Australia on the day the application is lodged. The CEO, upon receiving a valid application that meets these criteria, is required to make a written TCO as specified in section 269P(3). Additionally, the CEO must publish a notice in the Gazette as soon as practicable after accepting the application as valid, inviting any interested parties to submit their views on whether the TCO should be made, in accordance with section 269K(1).
The Act also outlines potential consequences for non-compliance. Although the explanatory statement does not detail specific criminal or civil penalties, the general implication is that failure to adhere to the requirements set forth in the Act could result in the denial of a TCO, which might affect the applicant's ability to benefit from the tariff concession. Importers who do not comply with the conditions for duty refunds as outlined in the Regulations may also face penalties. However, the explanatory statement does not provide specific maximum penalties for breaches of the Act or Regulations in this context.
The explanatory statement highlights that the TCO does not disadvantage any person or impose liabilities on anyone except the Commonwealth. Instead, it provides benefits to importers by allowing them to apply for a refund of duty on goods imported since the TCO was taken to have come into force. This suggests that while there may not be explicit penalties outlined, the legal framework is designed to ensure that the concessions granted do not unfairly impact non-Commonwealth entities and that any breaches of the Act or Regulations are subject to the broader legal consequences that may apply.