EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017599
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.
Assa Abloy Australia Pty Ltd applied for a TCO in respect of certain door closer parts on 16 April 2010.
Instrument
TCO No 1017599 was made on 02 July 2010. It declares that those certain door closer parts 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. 1017599 is taken to have come into force on 16 April 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. 1017599, enacted in 2010, is an instrument under the Customs Act 1901, which facilitates tariff concessions for specific goods. This legislation was introduced to address the need for a streamlined process to reduce customs duties on certain imported goods where no suitable Australian-made alternatives exist. The instrument was developed by the Chief Executive Officer of Customs, acting under the authority conferred by the Act, to ensure that such concessions are granted in a manner consistent with the objectives of the Customs Act. The primary policy objective of this instrument is to promote fair trade practices by preventing the imposition of tariffs on goods for which there are no substitutable Australian-made products, thereby benefiting importers and potentially encouraging domestic production in the long term.
Scope and Application
The Tariff Concession Instrument No. 1017599 under the Customs Act 1901 applies to the application submitted by Assa Abloy Australia Pty Ltd concerning certain door closer parts. This Act provides a framework for the Chief Executive Officer of Customs to grant Tariff Concession Orders (TCO) that reduce customs duties on specific imported goods. The application for a TCO is valid if, on the date of lodgement, there are no substitutable goods produced in Australia. The TCO is applicable to the goods specified in the order, which in this case are certain door closer parts, and effectively applies a zero rate of duty as opposed to the general rate of 5%. The application of this Act extends across the Commonwealth of Australia, and the TCO came into force on the date the application was lodged, 16 April 2010. The legislation does not impose any liabilities on persons other than the Commonwealth and does not disadvantage any person's rights as at the date of registration of the TCO. Subordinate instruments may further extend or specify the application of the Act.
Key Provisions
Section 269F of the Customs Act 1901 allows a person to apply to the Chief Executive Officer (CEO) of Customs for a Tariff Concession Order (TCO) in respect of goods. A TCO may be granted if the CEO is satisfied that the application meets the core criteria as outlined in section 269C of the Act. This typically involves ensuring that no substitutable goods are produced in Australia at the time of application, which is defined in section 269D as "goods produced in Australia," and in section 269E as "ordinary course of business." For the purposes of section 269P(3), if the CEO determines that the application meets these criteria, they must issue a written order declaring the goods to which the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. This order effectively reduces the customs duty on the specified goods.
The obligations imposed on the parties by the Customs Act 1901 and related instruments are significant. The CEO must rigorously assess whether the application for a TCO meets the core criteria, including ensuring that no substitutable goods are produced in Australia. Furthermore, the CEO must publish a notice in the Gazette inviting submissions from interested parties if they believe the TCO should not be made. In this particular case, the CEO did not receive any submissions, which could imply broad acceptance or lack of opposition to the TCO. Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities for actions taken before the TCO's effective date.
Breaches of the conditions under which a TCO is granted may result in civil or criminal consequences. While the specific penalties are not detailed in the provided text, the Customs Act 1901 generally outlines severe penalties for non-compliance, including fines and imprisonment. For example, making a false or misleading statement in connection with an application for a TCO could lead to penalties under the Act's provisions for fraudulent activities. It is essential for applicants and the CEO to adhere strictly to the legislative requirements to avoid these severe repercussions.