EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1012991
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.
Firexit Pty Ltd applied for a TCO in respect of certain fire extinguisher cartridges and containers on 15 March 2010.
Instrument
TCO No 1012991 was made on 04 June 2010. It declares that those certain fire extinguisher cartridges and containers 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. 1012991 is taken to have come into force on 15 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. 1012991, enacted under the Customs Act 1901, was introduced to address the need for tariff concessions on certain goods that are not produced in Australia. This legislation allows for the application of a lower rate of customs duty on specified goods, thereby promoting trade and economic benefits. The instrument was initiated by Firexit Pty Ltd, which applied for tariff concessions on specific fire extinguisher cartridges and containers on 15 March 2010. The instrument was subsequently issued on 4 June 2010, declaring that the specified goods are subject to a free duty rate, as no substitutable goods were produced in Australia at the time of the application. The policy objective is to ensure that the application of tariff concessions does not disadvantage existing rights and imposes no new liabilities on individuals or entities.
Scope and Application
The Tariff Concession Instrument No. 1012991 applies to the specific goods, namely certain fire extinguisher cartridges and containers, that are subject to a Tariff Concession Order (TCO) made under Part XVA of the Customs Act 1901. The application of this instrument is directed towards any entities or individuals seeking to import these goods into Australia. It is pertinent to note that the instrument does not apply to any goods specified in section 269SJ of the Act, which outlines those goods that cannot be subject to a TCO. The Act extends its reach across the Commonwealth of Australia, thereby impacting all states and territories uniformly. The legislation does not impose any new liabilities on any person and does not affect the rights of any person, except for the beneficial effect on importers who may apply for a refund of duty under the Customs Act 1901. The instrument itself is effective from the date the application for the TCO was lodged, which in this case is 15 March 2010.
Key Provisions
The Customs Act 1901 (the Act) allows for the creation of Tariff Concession Orders (TCOs) through Part XVA. A TCO can be applied for under section 269F by a person who wishes to have a lower rate of customs duty applied to certain goods. The Chief Executive Officer of Customs (the CEO) must then determine if the application meets the core criteria, which is defined in section 269C of the Act. If the CEO is satisfied that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, the CEO is obligated to make a TCO. This is outlined in subsection 269P(3) of the Act. For instance, TCO No. 1012991 was made on 4 June 2010 for certain fire extinguisher cartridges and containers after the CEO was satisfied that no substitutable goods were produced in Australia, applying a free rate of duty instead of the general rate of 5%.
The Act imposes several obligations on the CEO in the process of making a TCO. Firstly, under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice includes an invitation for any person who believes there are reasons why the TCO should not be made to submit a submission to the CEO. This ensures transparency and allows for any objections to be considered before a TCO is made. Additionally, under subsection 269S(1), a TCO is considered to have come into force on the day on which the application for the TCO was lodged. For TCO No. 1012991, this date was 15 March 2010. The Act also ensures that a TCO does not affect the rights of a person, other than the Commonwealth, as at the date of registration in a way that disadvantages them or imposes liabilities for actions taken before the registration date.
Failing to comply with the provisions of the Act can lead to various penalties and consequences. If the CEO does not adhere to the requirements for making a TCO, such as not publishing the notice in the Gazette or not considering submissions, this could be seen as a breach of procedural obligations. While the Act does not specify maximum penalties for such breaches, it does indicate that non-compliance could result in legal challenges or administrative penalties. For the entities subject to a TCO, there are no liabilities imposed by the TCO itself. However, if there is any fraudulent application for a TCO or misuse of the concession, this could lead to criminal charges under other sections of the Customs Act or related legislation, potentially resulting in fines or imprisonment.