EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0948291
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.
Dixon Asia Pacific applied for a TCO in respect of certain elbows fittings on 10 December 2009.
Instrument
TCO No 0948291 was made on 26 February 2010. It declares that those certain elbows fittings 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. 0948291 is taken to have come into force on 10 December 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, addresses the need for a structured approach to tariff concessions for specific goods. This Act, particularly through Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which can be applied for by any person and are subject to the approval of the Chief Executive Officer of Customs. The fundamental purpose of this legislation is to reduce the customs duty on goods that do not have substitutable equivalents produced in Australia, thereby encouraging trade and potentially benefiting importers. The Explanatory Statement for Tariff Concession Instrument No. 0948291, which was made on 26 February 2010, illustrates this process in practice, particularly for certain elbows fittings which were granted a TCO leading to a zero rate of duty, down from the standard 5%. The legislation ensures that such concessions do not adversely affect the rights of any parties as of the date of the concession application.
Scope and Application
The Customs Act 1901, specifically as applied through Tariff Concession Order (TCO) No. 0948291, applies to entities and individuals involved in the importation of certain elbows fittings, providing them with tariff concessions. This concession is applicable to goods that are not substitutable by locally produced items, thereby ensuring that the concession does not undermine domestic production. The Act operates on a national level across Australia, under the jurisdiction of the Commonwealth, and is administered by the Chief Executive Officer of Customs. The application of this legislation is triggered when an entity such as Dixon Asia Pacific applies for a TCO, which is subsequently assessed against the criteria set forth in the Act. Notably, the Act excludes certain goods from eligibility for tariff concessions as outlined in section 269SJ. The commencement of the TCO aligns with the date of the application, in this case, 10 December 2009, with the order itself taking effect on that date. This legislative framework ensures that no existing rights or liabilities are adversely affected by the concession, while also offering potential duty refunds to importers of the specified goods.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) relevant to Tariff Concession Orders (TCOs) are sections 269C, 269B, 269D, 269E, 269F, 269P, and 269SJ. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a TCO for goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria (section 269C), which generally means no substitutable goods were produced in Australia (section 269D), the CEO must make a written order declaring the goods to which the TCO applies (section 269P). The TCO then specifies a lower rate of duty, or in some cases, no duty at all, on the goods.
The obligations and requirements imposed by the Act on the parties or entities it governs include the necessity for an application to be lodged with the CEO by a person seeking a TCO (section 269F). The CEO is required to assess whether the application meets the core criteria and whether the goods are not those listed in section 269SJ. The CEO must also publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made (subsection 269K(1)). Once the CEO is satisfied that the application meets the criteria and no submissions are received, a TCO must be made and published, and it will come into force on the date the application was lodged (subsection 269S(1)). The TCO does not affect any rights of a person, other than the Commonwealth, as at the date of registration and does not impose any liabilities on any person in respect of anything done or omitted before the date of registration.
Any breach of the requirements or obligations under the Customs Act 1901 can result in civil or criminal consequences. However, the Explanatory Statement does not specify any offences, penalties, or civil/criminal consequences for breach of a TCO. The general legal framework for the Customs Act 1901 includes potential penalties for breaches such as fines and imprisonment, but these would need to be referred to in the context of specific breaches under other sections of the Act. The focus of the TCO is on tariff concessions and does not detail specific penalties for its breach.