EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1014803
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.
Bunnings Group Ltd applied for a TCO in respect of certain safety barrier screens on 25 March 2010.
Instrument
TCO No 1014803 was made on 11 June 2010. It declares that those certain safety barrier screens 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. 1014803 is taken to have come into force on 25 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 Australian Parliament, provides a framework for the regulation of customs duties and other charges, including the ability for the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) under Part XVA. These orders allow for reduced rates of customs duty on specified goods, subject to certain criteria being met. The instrument in question, Tariff Concession Instrument No. 1014803, was introduced to address the specific need for a tariff concession for certain safety barrier screens, following an application by Bunnings Group Ltd. The instrument was enacted to ensure that no substitutable goods were produced in Australia at the time of the application, thereby satisfying the core criteria set out in the Act. The objective of this particular TCO is to provide tariff relief for these goods, which would otherwise incur a general duty rate of 5%.
Scope and Application
The Customs Act 1901, specifically Part XVA, authorises the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) which provide for lower rates of customs duty on certain goods. This mechanism applies to any person or entity seeking to import goods that meet specific criteria, particularly when no substitutable goods are produced in Australia. The scope of the Act is national, as it operates under the Commonwealth and applies across all states and territories of Australia. TCO No. 1014803, for instance, pertains to certain safety barrier screens for which the CEO determined that no substitutable goods were produced in Australia, thus allowing for a concessional rate of duty. The Act mandates that any person with an interest in opposing a TCO application must submit their objections, though no such objections were received for this specific case. The TCO becomes effective from the date the application was lodged, in this instance, 25 March 2010. Importantly, the TCO does not retroactively affect the rights of any person, nor does it impose any liabilities on individuals for actions taken prior to the TCO's effective date.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 1014803 under the Customs Act 1901 are sections 269C, 269F, and 269P. Section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of specific goods. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, they must make a written order (a TCO) declaring that the goods in question are subject to a prescribed rate of duty in Schedule 4 of the Customs Tariff Act 1995. Section 269P(3) specifies that the CEO must make such an order if satisfied that no substitutable goods are produced in Australia, thereby meeting the core criteria.
The Act imposes several obligations and requirements on the parties it governs. Firstly, an applicant, such as Bunnings Group Ltd, must submit an application to the CEO for a TCO under section 269F, ensuring that the application pertains to goods not listed in section 269SJ, which excludes certain goods from TCO eligibility. The CEO, upon accepting the application, must then assess whether the application meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods are produced in Australia, as defined by sections 269D, 269E, and 269F. If the CEO finds the application meets these criteria, they must publish a notice in the Gazette inviting submissions from any interested parties and make a TCO if no objections are raised.
Failure to comply with the requirements of the Customs Act 1901 and the associated TCO provisions can lead to various offences and penalties. Section 269Q of the Act stipulates that an application for a TCO must include all necessary information as specified by the CEO, and failure to do so can be considered an offence. The penalties for such offences can include fines and, in severe cases, imprisonment. The exact penalties are not specified in the Act but are subject to the general penalty provisions of the Customs Act and associated regulations. Furthermore, any person who knowingly makes a false statement or provides misleading information in an application for a TCO may face criminal charges and associated penalties.
Under the Customs Tariff Act 1995, the CEO must ensure that the TCO does not affect the rights of any person other than the Commonwealth in a manner that would disadvantage them or impose liabilities for actions taken before the TCO's effective date. This means that while the TCO may benefit importers by allowing them to apply for a refund of duty on goods imported since the TCO's effective date, it does not impose any liabilities on any person. This protection ensures that the TCO is designed to benefit eligible importers without unfairly disadvantaging others.