EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0942987
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.
ED Oates applied for a TCO in respect of certain carpet sweepers on 13 November 2009.
Instrument
TCO No 0942987 was made on 22 January 2010. It declares that those certain carpet sweepers 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. 0942987 is taken to have come into force on 13 November 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. 0942987, made under the Customs Act 1901, was enacted in 2010 to address the specific issue of providing tariff concessions for certain goods not produced in Australia. This instrument was introduced by the Chief Executive Officer of Customs in response to an application from ED Oates regarding certain carpet sweepers. The fundamental aim of this legislation is to provide tariff relief for goods that do not have Australian equivalents, thus encouraging the importation of these goods by reducing customs duty to zero. The instrument ensures that the rights of importers are protected and that no liabilities are imposed on individuals as a result of its enactment. The CEO of Customs made this decision after considering that no substitutable goods were produced in Australia and after inviting public submissions, none of which opposed the tariff concession.
Scope and Application
The Tariff Concession Instrument No. 0942987 under the Customs Act 1901 applies to individuals or entities seeking a tariff concession order (TCO) for specific goods that are not produced in Australia. This instrument is designed to provide relief from customs duties for certain goods by applying a lower rate or, in some cases, free duty, provided that no substitutable goods are produced domestically in the ordinary course of business. The application of the TCO is contingent upon the Chief Executive Officer of Customs being satisfied that the core criteria are met, which includes verifying that substitutable goods are not produced in Australia on the day the application was lodged. The instrument has a national jurisdictional reach and applies to all entities importing the specified goods within Australia, with no stated exclusions apart from goods explicitly listed in section 269SJ of the Act that cannot be subject to a TCO. The TCO does not affect any pre-existing rights of persons, except the Commonwealth, and does not impose any new liabilities on any person.
Key Provisions
The primary operative sections of this legislation (section 269F and section 269C of the Customs Act 1901) establish the process for applying for a Tariff Concession Order (TCO) and the conditions under which such an order may be granted. A TCO can be applied for by any person under section 269F, but the Chief Executive Officer of Customs (CEO) must first ensure the goods in question are not specified in section 269SJ, which lists goods ineligible for tariff concessions. If the application does not pertain to these ineligible goods, the CEO must then assess whether it meets the core criteria outlined in section 269C. This involves determining that, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. If the CEO finds that the application meets these criteria, they are required under section 269P(3) to issue a TCO that declares the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies.
The obligations imposed by the Act on the parties involved are primarily on the CEO, who must rigorously assess each TCO application. The CEO must ensure that the application complies with the eligibility criteria and that no substitutable goods were produced in Australia on the date the application was lodged. Additionally, the CEO is mandated by section 269K(1) to publish a notice in the Gazette, inviting any interested parties to submit objections if they believe the TCO should not be granted. In this case, the CEO did not receive any submissions, indicating that no objections were lodged. Once the CEO is satisfied that an application meets the core criteria, they must issue the TCO in writing, declaring the specified goods as eligible for the concession.
There are no specific offences, penalties, or civil/criminal consequences mentioned in this legislation for the failure to comply with the TCO provisions, nor for the breach of any obligations under the Act. However, the legislative framework ensures that the rights of persons other than the Commonwealth are not adversely affected by the TCO. Specifically, the rights of importers will be beneficially impacted, as they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as per paragraph 126(1)(r) of the Regulations. The legislation explicitly states that the TCO does not impose any liabilities on any person, ensuring that the interests of all stakeholders are protected.