EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014406
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.
Bob Littler Agencies applied for a TCO in respect of certain boat steering wheels on 24 March 2010.
Instrument
TCO No 1014406 was made on 11 June 2010. It declares that those certain boat steering wheels 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. 1014406 is taken to have come into force on 24 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. 1014406, enacted in 2010 under the Customs Act 1901, addresses the need for tariff concessions for specific imported goods where no suitable Australian-made alternatives exist. This instrument allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) that reduce the customs duty rate on certain imported goods to zero, provided that no substitutable goods are produced in Australia. The Act was introduced to facilitate the import of goods that are essential and cannot be produced domestically, thereby benefiting consumers and businesses by lowering the cost of such imports. The instrument came into effect on the day the application was lodged, which was 24 March 2010, and does not retroactively disadvantage any party or impose new liabilities. This legislative measure ensures that importers can apply for duty refunds on goods imported since the TCO took effect, thereby providing a clear policy objective of encouraging trade and economic efficiency.
Scope and Application
The Tariff Concession Instrument No. 1014406 applies to the concessions granted on certain boat steering wheels, as specified in the Customs Act 1901. This Act operates at the Commonwealth level, and the Tariff Concession Order (TCO) applies to the entities or individuals involved in the importation of these goods. The geographic reach of the legislation is national, as it is a Commonwealth Act. The application of this particular TCO is limited to the specific goods outlined in the instrument and does not extend to any other goods or industries unless specified otherwise in subsequent orders or amendments. Exclusions or exemptions are outlined in section 269SJ of the Customs Act 1901, which lists goods that cannot be subject to a TCO. The CEO of Customs has the authority to extend or restrict the application of this Act through subordinate instruments, ensuring that the scope can be adapted to meet changing circumstances or policy objectives.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1014406 are sections 269C, 269F, 269P, and 269S. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). Section 269C specifies the core criteria that a TCO application must meet, which is that on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order declaring that the goods in question are subject to a prescribed item in Schedule 4 of the Customs Tariff Act 1995. Section 269S outlines that a TCO is taken to have come into force on the day the application was lodged.
The obligations imposed by the Act on the parties involved are quite clear. The CEO must ensure that the application for a TCO is assessed against the core criteria set out in section 269C. This includes verifying that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. Additionally, the CEO is required to publish a notice in the Gazette inviting any person who believes there are reasons why the TCO should not be made to submit their views. In this case, the CEO did not receive any submissions in response to this invitation. Once the CEO is satisfied that the application meets the core criteria, they must make a written order (TCO) specifying that the goods in question are subject to a particular item in Schedule 4 of the Customs Tariff Act 1995.
The Act does not explicitly list offences, penalties, or civil/criminal consequences for breach of the TCO provisions. However, it does state that a 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 in respect of anything done or omitted to be done before the date of registration. This means that the rights of importers will be beneficially affected, and they will be able to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. There is no mention of specific penalties for non-compliance with the TCO provisions, but the Act's focus on protecting the rights of importers and not imposing new liabilities suggests a regulatory approach rather than punitive measures.
Overall, the Act provides a structured process for the CEO to assess and approve TCO applications, ensuring that the rights of importers are protected while also preventing the imposition of new liabilities on any person. The emphasis on transparency through the Gazette notice and the lack of submissions in response to this particular TCO indicate that the process is functioning as intended.