EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1015000
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 bird baths on 26 March 2010.
Instrument
TCO No 1015000 was made on 11 June 2010. It declares that those certain bird baths 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. 1015000 is taken to have come into force on 26 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. 1015000 was enacted in 2010 under the Customs Act 1901 to address the specific needs of importers by providing tariff concessions on certain goods. This legislative instrument was introduced in response to an application from Bunnings Group Ltd for a Tariff Concession Order (TCO) regarding particular bird baths. The Customs Act 1901 allows the Chief Executive Officer of Customs to issue TCOs that reduce the rate of customs duty on goods, provided that certain criteria are met, such as the absence of substitutable goods produced in Australia. The policy objective behind this instrument is to facilitate smoother importation processes and potentially reduce costs for importers by applying a lower rate of duty, in this case, free of charge, on the specified bird baths. The instrument came into force on the date the application was lodged, 26 March 2010, and does not affect any existing rights or impose new liabilities on parties other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 1015000 under the Customs Act 1901 applies to specific goods, in this case certain bird baths, and is administered by the Chief Executive Officer of Customs (CEO). The Act allows for the reduction or exemption of customs duty on certain imported goods if the CEO determines that no substitutable goods are produced in Australia in the ordinary course of business. This particular instrument, effective from 26 March 2010, applies to the goods specified in the instrument and grants them a zero duty rate, as opposed to the general rate of 5%. The application of this Act is limited to the Commonwealth jurisdiction and does not affect any rights of persons other than the Commonwealth, ensuring that no existing rights or liabilities are adversely impacted by the concessions granted. Exclusions under the Act pertain to goods specified in section 269SJ, which are ineligible for tariff concessions. The application of the Act may be extended or clarified through subordinate instruments, which can provide additional definitions or conditions for eligibility.
Key Provisions
The primary operative sections of this legislation concern the making of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C outlines the core criteria that must be met for the CEO to consider making a TCO, primarily that no substitutable goods are produced in Australia on the day the application is lodged. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order (the TCO) specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods in question.
The obligations and requirements imposed by this Act on the parties involved are primarily on the CEO of Customs. When a TCO application is received, the CEO must first ensure that the application is not in respect of goods specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. If the application is valid, the CEO must then determine whether the application meets the core criteria as outlined in section 269C. This involves assessing whether any substitutable goods were produced in Australia on the day the application was lodged. If the criteria are met, the CEO is required to make a written TCO, as specified in section 269P(3). Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, though this step did not result in any submissions for this particular TCO.
The consequences for breach of the provisions under this Act are primarily civil in nature, though specific penalties are not outlined in the text. However, the Act does not impose liabilities on any person in respect of anything done or omitted to be done before the date of registration of the TCO. Instead, it ensures that the rights of importers will be beneficially affected, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force, as provided under paragraph 126(1)(r) of the Regulations. The Act is designed to ensure that the implementation of a TCO does not disadvantage any person other than the Commonwealth or impose new liabilities on them.