EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011964
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.
Delf Systems International Pty Ltd applied for a TCO in respect of certain whiteboard wall mounts on 09 March 2010.
Instrument
TCO No 1011964 was made on 28 May 2010. It declares that those certain whiteboard wall mounts 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. 1011964 is taken to have come into force on 09 March 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. 1011964, enacted in 2010, is an instrument under the Customs Act 1901, which aims to provide relief from customs duties on certain goods. This instrument was introduced to address the need for tariff concessions on goods where no suitable Australian-made alternatives exist, thereby potentially lowering import costs and stimulating economic activity. The instrument was developed by the Chief Executive Officer of Customs, following an application by Delf Systems International Pty Ltd for tariff concessions on specific whiteboard wall mounts. The policy objective behind this instrument is to ensure that Australian businesses and consumers have access to competitively priced imported goods where no domestic alternatives are available, thereby fostering economic efficiency and consumer choice.
The process for creating this instrument involved a review of the application against the core criteria specified in the Customs Act 1901, which mandates that no substitutable goods are produced in Australia. The CEO determined that the application met these criteria, resulting in the issuance of Tariff Concession Order No. 1011964, which came into effect on the date the application was lodged. This order effectively reduces the duty on the specified whiteboard wall mounts from 5% to free, benefiting importers who can claim refunds for duties paid on imports since the effective date of the concession.
Scope and Application
The Customs Act 1901, specifically Part XVA, pertains to the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, designed to provide lower rates of customs duty on certain goods. This legislative framework applies to individuals and entities seeking to import goods that meet the criteria for tariff concessions. Such criteria include the absence of substitutable goods produced in Australia, ensuring that the concession does not undermine local production. The Act operates on a Commonwealth level, with its reach extending to all imported goods subject to customs duties. Notably, the Act excludes certain goods from eligibility as specified in section 269SJ. The application of TCOs is further refined through subordinate instruments such as regulations, which may detail specific exclusions, application processes, and administrative procedures. The Tariff Concession Instrument No. 1011964 exemplifies this process, where Delf Systems International Pty Ltd successfully applied for a tariff concession on whiteboard wall mounts, resulting in a reduction of duty from 5% to free.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 1011964, as referenced under the Customs Act 1901, involve the granting of tariff concessions for specific goods. Under section 269F, an application for a Tariff Concession Order (TCO) can be made to the Chief Executive Officer of Customs (CEO) for goods not specified in section 269SJ, which outlines goods ineligible for a TCO. The CEO must then determine if the application meets the core criteria, as outlined in sections 269B and 269C, which relate to the production of substitutable goods in Australia. If the CEO is satisfied that no substitutable goods are produced domestically and the application meets the criteria, they must issue a written TCO under section 269P(3). This specific TCO No. 1011964 concerns certain whiteboard wall mounts, declaring them subject to a lower rate of duty as specified in item 50 of Schedule 4 to the Customs Tariff Act 1995.
The obligations and requirements imposed by the Act on parties or entities include the necessity for the CEO to assess and verify the eligibility of goods for a TCO, ensuring that no substitutable goods are produced in Australia. The CEO is mandated to publish a notice in the Gazette inviting submissions from any interested parties who may oppose the TCO, as per subsection 269K(1). This step is crucial for transparency and due process. In this case, the CEO did not receive any submissions against the TCO application. Furthermore, the TCO does not affect the rights of any person, except the Commonwealth, retroactively, ensuring that no liabilities are imposed for actions taken before the TCO's effective date.
The legislation also outlines the potential consequences for non-compliance. Under the Customs Act 1901, there are specific penalties for breaches related to tariff concessions. For instance, any fraudulent application for a TCO or misrepresentation of facts could lead to civil or criminal penalties. Although the explanatory statement does not detail specific penalties, the Customs Act generally imposes fines up to a substantial amount and, in severe cases, imprisonment. The exact penalties would be determined by the courts based on the nature and severity of the breach. It is also important to note that the Act provides mechanisms for the refund of duties to importers under paragraph 126(1)(r) of the Regulations, which becomes applicable once a TCO is in effect.