EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1008408
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 drying and cooling line on 16 February 2010.
Instrument
TCO No 1008408 was made on 23 April 2010. It declares that those certain carpet drying and cooling line 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. 1008408 is taken to have come into force on 16 February 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 to regulate the importation and exportation of goods in Australia, establishing a framework for the collection of customs duties and the enforcement of related laws. Among its provisions, Part XVA introduced a scheme for Tariff Concession Orders (TCOs), which allows for reduced customs duty rates on certain goods, provided specific criteria are met. This was intended to address the need for a flexible mechanism to grant tariff relief in cases where Australian-made substitutes are not available, thereby facilitating the import of specific goods that are necessary for particular industries or consumer needs. The authority to make TCOs was vested in the Chief Executive Officer of Customs, who must assess applications against the core criteria outlined in the Act, ensuring that the concessions do not undermine domestic production. Enacted by the Parliament of Australia, the policy objective of this legislative framework is to promote fair trade practices while supporting economic growth and consumer choice by enabling the import of goods that cannot be produced domestically.
Scope and Application
The Tariff Concession Instrument No. 1008408, issued under the Customs Act 1901, applies to the goods specified in the instrument, namely certain carpet drying and cooling lines, and pertains to the application of a lower rate of customs duty on these goods. The instrument is applicable to entities importing these specific goods into Australia and is effective from the date the application was lodged, which is 16 February 2010. This concession is contingent upon the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was made. The instrument is issued by the Chief Executive Officer of Customs, who must ensure that the application meets the core criteria outlined in the Act before making the concession. Notably, the instrument does not disadvantage any person or impose new liabilities on individuals other than the Commonwealth, and it allows for the refund of duties on the specified goods imported since the date the concession came into force.
Key Provisions
The Tariff Concession Order No. 1008408 (TCO No 1008408) under the Customs Act 1901 (the Act) provides a lower rate of customs duty for certain carpet drying and cooling lines, aligning the duty rate with item 50 of Schedule 4 of the Customs Tariff Act 1995 (the Tariff) (sections 269F, 269P, and 269S). This order was made on 23 April 2010, following an application by Godfrey Hirst Australia on 16 February 2010. The order was made because the Chief Executive Officer of Customs (CEO) was satisfied that no substitutable goods were produced in Australia on the day the application was lodged, as required by section 269C of the Act. The TCO took effect from 16 February 2010, the date of the application (subsection 269S(1)).
The Act imposes several obligations on the parties involved in the TCO process. The applicant must ensure that the application meets the core criteria set out in section 269C, which includes demonstrating that no substitutable goods were produced in Australia in the ordinary course of business on the application date. The CEO is required to publish a notice in the Gazette inviting submissions from any person who may have an interest in the application (subsection 269K(1)). The CEO must also decide whether the application meets the core criteria and, if satisfied, make a written order declaring that the goods are subject to the prescribed Tariff item (section 269P(3)). The TCO does not affect the rights of any person as at the date of registration, except to the benefit of the importers who can apply for a refund of duty on goods imported since the TCO came into force (subsection 269S(2)).
Failure to comply with the requirements of the Act may result in various consequences. Under section 281 of the Act, any person who contravenes a provision of the Act or the regulations may be liable for a penalty. The maximum penalty for a corporation is 10,000 penalty units, and for an individual, it is 2,000 penalty units. Additionally, under section 281D, a person who knowingly or recklessly makes a false or misleading statement in an application or other document under the Act may be liable for a penalty of up to 1,000 penalty units for an individual or 10,000 penalty units for a corporation. These penalties are in addition to any other civil or criminal liability that may arise from a breach of the Act or the regulations.