EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1003596
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.
Godfrey Hirst Australia applied for a TCO in respect of certain carpet tile production and transport lines on 19 January 2010.
Instrument
TCO No 1003596 was made on 07 April 2010. It declares that those certain carpet tile production and transport lines 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. 1003596 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 Tariff Concession Instrument No. 1003596, enacted in 2010, is a response to a need within the Customs Act 1901 to provide relief on customs duties for specific goods. This Act allows for the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can reduce the duty rates on certain goods if they meet specified criteria. In this instance, Godfrey Hirst Australia applied for a TCO for certain carpet tile production and transport lines, resulting in Instrument No. 1003596. This instrument was issued after the CEO determined that no substitutable goods were produced in Australia, thus meeting the core criteria. The Tariff Concession Order provides a rate of duty of free on these goods, which contrasts with the general rate of 5%. This legislative instrument aims to ensure that importers of these goods are not disadvantaged and can potentially apply for refunds of duties paid on imports since the effective date of the TCO.
The process of enacting this Tariff Concession Order involved the CEO accepting the application and publishing a notice in the Gazette, inviting any interested parties to submit their views on the matter. In this case, no submissions were received. The TCO came into effect on the date the application was lodged, 19 January 2010, and it does not affect the rights of any person adversely or impose any new liabilities. The primary objective of this legislation is to facilitate trade by reducing the financial burden on importers of specified goods.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process for Tariff Concession Orders (TCOs) and applies to any person or entity that seeks to import goods that qualify for a concession on customs duty. The Act is a Commonwealth legislation, thus its provisions extend across all states and territories of Australia. The core criteria for a TCO, as stipulated in section 269C, mandates that the goods in question must not have substitutable goods produced in Australia in the ordinary course of business at the time the application is lodged. A TCO application is processed by the Chief Executive Officer of Customs (CEO) who must consider submissions from the public as required by section 269K(1). If the application meets the core criteria, the CEO issues a TCO, as demonstrated in Tariff Concession Instrument No. 1003596, which applied to certain carpet tile production and transport lines. The TCO allows for these specified goods to be imported duty-free, thereby benefiting importers without imposing any liabilities on other parties. Notably, this concession does not disadvantage or impose liabilities on any person other than the Commonwealth, nor does it affect the rights of any person as at the date of registration.
Key Provisions
The primary operative sections of the Customs Act 1901, as applied in this instance, are sections 269C, 269F, and 269P (subsection 3). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO). The CEO is required to assess whether the application meets the core criteria, which are specified in section 269C. If the CEO determines that the application satisfies these criteria, they must issue a written TCO, as mandated by section 269P(3). This order specifies that the goods subject to the TCO application are to be subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this particular case, the CEO was satisfied that no substitutable goods were produced in Australia on the date the application was lodged, thus allowing the issuance of TCO No. 1003596.
The Act imposes several obligations and requirements on the parties involved. The CEO must, upon receiving a valid application for a TCO, ensure that it complies with the core criteria, which includes confirming that no substitutable goods were produced in Australia. If the application meets these criteria, the CEO is required to make a written TCO, as per section 269P(3). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, the CEO did not receive any submissions, which facilitated the issuance of the TCO.
In terms of potential breaches and consequences, the Act does not explicitly outline offences, penalties, or civil/criminal consequences for failing to comply with the requirements of a TCO. However, it is essential to note that the TCO itself does not affect the rights of any person other than the Commonwealth as at the date of registration, nor does it impose liabilities on any person in respect of actions taken before the registration date. Any potential breach of the Customs Act 1901 or the Customs Tariff Act 1995 may result in penalties as outlined in those respective Acts, but these are not directly related to the issuance of a TCO. Importers of the goods subject to the TCO may apply for a refund of duty on goods imported since the TCO is taken to have come into force, under paragraph 126(1)(r) of the Regulations.