EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1015005
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 1015005 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. 1015005 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. 1015005, enacted under the Customs Act 1901, addresses the need for tariff concessions on specific goods, in this case, certain bird baths applied for by Bunnings Group Ltd. This instrument was introduced to provide a lower rate of customs duty on these goods, thereby encouraging their importation and potentially benefiting consumers. The instrument was made by the Chief Executive Officer of Customs, acting under the authority provided by Part XVA of the Customs Act 1901. The policy objective is to support Australian businesses by reducing the cost of importing specific goods that are not produced domestically, thus aiding in their competitive positioning in the market. The instrument came into force on the date the application was lodged, 26 March 2010, and does not disadvantage any person other than the Commonwealth or impose new liabilities.
Scope and Application
The Customs Act 1901, through its Part XVA, enables the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that reduce the customs duty rate on specified goods. These concessions apply to goods for which an application has been made and approved by the CEO, provided that the goods are not specified in section 269SJ of the Act and no substitutable goods are produced in Australia in the ordinary course of business. The scope of this legislation is primarily concerned with the importation of goods, providing relief to importers by reducing or eliminating customs duties on certain items. The application of TCOs is national in reach, impacting all importers across Australia. The process includes a mandatory publication in the Gazette to allow for objections, although in the case of TCO No. 1015005, no submissions were received. The commencement date of a TCO is the date the application was lodged, with no retroactive effect on duties or liabilities incurred prior to this date. This legislative instrument directly benefits importers by potentially allowing them to claim refunds on duties paid on imports of the specified goods since the effective date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 1015005, made under the Customs Act 1901, grants tariff concessions on certain bird baths applied for by Bunnings Group Ltd (section 269F). If the Chief Executive Officer of Customs (CEO) determines that the application meets the core criteria—primarily, that no substitutable goods were produced in Australia in the ordinary course of business on the application date (sections 269C and 269P(3))—a Tariff Concession Order (TCO) can be issued. This order effectively reduces the customs duty on these bird baths from a general rate of 5% to a duty-free rate (section 269P(3)).
The obligations imposed by the Act on the CEO and other relevant parties include the requirement to assess whether the application for a TCO meets the core criteria, which involves confirming that no substitutable goods were produced in Australia at the time the application was lodged (section 269C). The CEO must also publish a notice in the Gazette inviting submissions from any interested parties who may oppose the concession, though in this case, no submissions were received (subsection 269K(1)). Once the CEO is satisfied that the application meets the criteria, they must make a written TCO, specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods (subsection 269P(3)).
The Customs Act 1901 does not explicitly detail the offences or penalties for breaching the conditions of a TCO. However, any failure to comply with the terms of the TCO or other related Customs Act provisions could potentially result in civil or criminal penalties. These may include fines or other sanctions under the broader framework of the Customs Act. The exact penalties would depend on the specific nature and severity of the breach, as well as any other relevant laws or regulations that might apply. The Act ensures that the rights of persons other than the Commonwealth are not adversely affected by the issuance of a TCO, and no new liabilities are imposed on any person as a result of the concession (subsection 269S(1)).