EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1011995
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.
C. K. MacDonald Imports Pty Ltd applied for a TCO in respect of certain storage boxes on 10 March 2010.
Instrument
TCO No 1011995 was made on 28 May 2010. It declares that those certain storage boxes 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. 1011995 is taken to have come into force on 10 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. 1011995 was enacted under the Customs Act 1901 to provide a concession on customs duty for certain goods. This legislative instrument was introduced to address the need for tariff concessions where goods are not produced in Australia and are not subject to the exclusions set out in section 269SJ of the Act. The instrument was enacted by the Chief Executive Officer of Customs in accordance with section 269C of the Act, which mandates that a Tariff Concession Order (TCO) may be made if the application meets the core criteria, specifically if no substitutable goods are produced in Australia in the ordinary course of business. The policy objective of this instrument is to facilitate the import of goods that are not locally produced, thereby supporting trade and potentially reducing costs for importers. The TCO was published in the Gazette, inviting submissions, but none were received, and it came into effect on the date the application was lodged, 10 March 2010.
Scope and Application
The Customs Act 1901 provides a framework for the imposition of customs duties on goods imported into Australia, and includes provisions for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCOs) that reduce the rate of duty on certain goods. The application of this Act to a specific case, such as Tariff Concession Instrument No. 1011995, involves determining whether the goods in question are eligible for a TCO. The application must meet the core criteria, which include the absence of substitutable goods produced in Australia. If the criteria are met, the CEO issues a TCO, which, in this instance, was applied to certain storage boxes, resulting in a reduction of the customs duty rate from 5% to free. This process is applicable to any entity or individual seeking to import goods into Australia and wishing to benefit from tariff concessions, provided the goods meet the specified criteria and no party objects to the concession. The application of TCOs is further governed by the Customs Tariff Act 1995, which details the rates of duty that apply to various goods.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework through which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO) under section 269F (s 269F). This process allows for a lower rate of customs duty to be applied to certain goods, provided the conditions of the scheme are met. Specifically, section 269C states that an application for a TCO will meet the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (s 269C). The terms 'substitutable goods' and 'ordinary course of business' are defined in sections 269D and 269E respectively (ss 269D, 269E).
The Act imposes several obligations on the parties involved in the process of applying for and receiving a TCO. Firstly, any person seeking to apply for a TCO must ensure that the goods in question do not have substitutable equivalents produced in Australia (s 269C). The CEO has the duty to evaluate the application against the core criteria and, if satisfied, to issue a written TCO order (s 269P(3)). Moreover, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who may object to the making of the TCO (s 269K(1)). In this instance, no submissions were received in response to the published notice.
Breach of the provisions under this scheme can lead to various consequences. The Act does not specify particular offences or penalties for failing to comply with the requirements for a TCO; however, general legal principles would apply if there were any misrepresentations or fraudulent activities involved in the application process. Any failure to adhere to the terms of the TCO once granted could potentially result in legal action for breach of the order. In terms of civil or criminal consequences, the Act does not explicitly outline specific penalties but general legal remedies would be available for any breach of the order.