EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012356
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.
Caroma Dorf applied for a TCO in respect of certain sink accessories on 11 March 2010.
Instrument
TCO No 1012356 was made on 28 May 2010. It declares that those certain sink accessories 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. 1012356 is taken to have come into force on 11 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 Customs Act 1901, enacted by the Parliament of Australia, introduced a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO) to apply lower rates of customs duty on certain goods. The Customs Act 1901 (the Act) allows for a streamlined process whereby businesses can apply for reduced customs duty on goods not produced in Australia in the ordinary course of business, thus ensuring competitive pricing and fostering trade. This legislative measure was designed to address the economic disadvantage faced by businesses importing goods that are not domestically produced, thereby promoting fair trade practices and economic efficiency. The policy objective is to facilitate trade by reducing the cost burden on importers, which in turn can lead to lower consumer prices and increased market competitiveness.
Scope and Application
The Tariff Concession Instrument No. 1012356 applies to goods that are the subject of a Tariff Concession Order (TCO) under the Customs Act 1901, specifically targeting those goods for which a lower rate of customs duty applies. This Act applies to entities and individuals who import or intend to import goods specified in the TCO. It pertains to transactions involving these specific goods and is governed by the criteria outlined in sections 269C, 269D, 269E, and 269SJ of the Act. The geographic scope of this legislation is national, as it operates under the Commonwealth jurisdiction and affects customs practices across Australia. The instrument does not disadvantage any person or impose liabilities on anyone in respect of actions taken before the TCO was registered, ensuring that existing rights and obligations are protected. The commencement of the TCO is effective from the date the application was lodged, in this case, 11 March 2010. Any exclusions are determined by section 269SJ of the Act, which specifies goods that cannot be subject to a TCO. The application of this Act can be extended or restricted through subordinate instruments, which may include regulations and guidelines set forth by the Chief Executive Officer of Customs.
Key Provisions
The Customs Act 1901, as amended by Tariff Concession Instrument No. 1012356, contains key provisions that allow for the reduction or elimination of customs duty on certain goods. Specifically, section 269F of the Act permits a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. This application process is conditional upon the goods not being specified in section 269SJ, which lists items ineligible for a TCO. For an application to be successful, the CEO must determine that the application meets the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia at the time of the application.
The obligations imposed by the Act on the CEO are to assess whether the application aligns with the core criteria and, if satisfied, to issue a written TCO. This TCO specifies that the goods in question will be subject to a lower rate of duty or, in some cases, no duty at all, as outlined in the prescribed item of Schedule 4 to the Customs Tariff Act 1995. In the case of TCO No. 1012356, the CEO determined that certain sink accessories would be subject to a duty rate of free, previously at 5%.
Failure to comply with the requirements of the Act or the terms of a TCO could result in legal repercussions. Under the Customs Act, breaches of the terms of a TCO may lead to civil or criminal penalties, depending on the nature and intent of the breach. Civil penalties can include fines, and in severe cases, criminal penalties may apply, including imprisonment. The exact penalties are not specified in the explanatory statement but would be in line with the general penalties outlined under the Customs Act for non-compliance with customs regulations.
The Act also mandates that the CEO publish a notice in the Gazette inviting submissions on the TCO application. This public consultation process ensures transparency and allows interested parties to voice their concerns. In the case of TCO No. 1012356, no submissions were received in response to the published notice. The TCO came into effect on 11 March 2010, the date the application was lodged, and it does not affect the rights of any person as they stood before the date of registration, nor does it impose any new liabilities. Importers of the affected goods can benefit from this order by applying for a refund of duties paid on imports made since the TCO's effective date.