EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1003386
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.
Edgar Edmondson Pty Ltd applied for a TCO in respect of certain housekeeping trolleys on 19 January 2010.
Instrument
TCO No 1003386 was made on 09 April 2010. It declares that those certain housekeeping trolleys 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. 1003386 is taken to have come into force on 19 January 2010.
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 was enacted by the Australian Parliament to provide a comprehensive framework for the regulation of customs and border control, including the imposition of duties and the facilitation of trade. One aspect of this Act is the establishment of a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. Enacted to address the problem of goods being subject to customs duty when substitutable goods are not produced in Australia, the Act allows for a lower rate of customs duty for certain goods if specified criteria are met. The policy objective behind this is to encourage the production of goods within Australia by providing tariff relief for imported goods where domestic production does not meet the demand or specifications. The Customs Act 1901 thus aims to balance the need for revenue generation through customs duties with the encouragement of local manufacturing and trade efficiency.
Scope and Application
The Tariff Concession Instrument No. 1003386, made under the Customs Act 1901, pertains specifically to the application of a Tariff Concession Order (TCO) for certain housekeeping trolleys by Edgar Edmondson Pty Ltd. This legislation applies to the entity that applied for the concession, which in this case is Edgar Edmondson Pty Ltd, and the goods specified in the application, namely the housekeeping trolleys. The Act enables the Chief Executive Officer of Customs to make decisions regarding the eligibility of goods for tariff concessions based on criteria outlined in the Act, ensuring that the goods in question are not substitutable by Australian-produced items and are not subject to exclusions specified in section 269SJ. The geographic reach of this legislation is national, as it operates under the Commonwealth's authority to regulate customs duties. The legislation also extends its application through subordinate instruments, as it references the Customs Tariff Act 1995 for the specific duty rates and items. The commencement of the TCO aligns with the date of the application, 19 January 2010, and the instrument itself came into force on the same date, without imposing any liabilities or disadvantaging any party other than the Commonwealth.
Key Provisions
The key operative sections of Tariff Concession Instrument No. 1003386 under the Customs Act 1901 (section 269F) allow an application for a Tariff Concession Order (TCO) to be made by any person to the Chief Executive Officer of Customs (section 269P(3)). If the CEO is satisfied that the application is valid and meets the core criteria (section 269C), they must issue a written TCO. This order declares that the specified goods are subject to a lower rate of customs duty as outlined in Schedule 4 to the Customs Tariff Act 1995. For the particular case of housekeeping trolleys, the general duty rate of 5% is reduced to free under this TCO (item 50 of Schedule 4).
The Act imposes several obligations on both the applicant and the CEO. The applicant must ensure their application is valid and meets the core criteria, which include demonstrating that no substitutable goods are produced in Australia at the time of application. The CEO must review the application, satisfy themselves that it meets the core criteria, and make a TCO if satisfied. Additionally, the CEO is required to publish a notice in the Gazette inviting submissions from any interested parties who may have objections to the TCO. In this case, no objections were received (subsection 269K(1)).
Failure to comply with the requirements of the Customs Act 1901 may lead to various consequences. The Act does not explicitly detail specific offences or penalties for breaches related to TCOs; however, general provisions of the Customs Act apply. Non-compliance with the customs laws, including failure to adhere to TCOs, may result in civil or criminal penalties. For example, section 240 of the Customs Act allows for civil penalties including fines, and section 242 permits criminal penalties, including imprisonment, for serious breaches.
The TCO itself has a specific commencement date as per subsection 269S(1), which in this case is 19 January 2010. This means that the TCO is effective from the date the application was lodged. Importantly, the TCO does not affect the rights of any person as at the date of registration, ensuring that no existing rights or liabilities are adversely impacted by the concession. Importers, however, benefit from the TCO as they can apply for a refund of duties paid on the goods imported since the effective date of the TCO (paragraph 126(1)(r) of the Regulations).
Overall, Tariff Concession Instrument No. 1003386 streamlines the importation process for certain housekeeping trolleys by eliminating customs duty, provided the conditions outlined in the Customs Act 1901 are met. The legal framework ensures that the process is transparent and fair, with clear obligations and potential consequences for non-compliance.