EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1017720
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.
Lisec Australia Pty Ltd applied for a TCO in respect of certain glass sealant mixing and metering dispensers on 16 April 2010.
Instrument
TCO No 1017720 was made on 09 July 2010. It declares that those certain glass sealant mixing and metering dispensers 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. 1017720 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. 1017720 was enacted in 2010 under the Customs Act 1901 to address the need for tariff concessions on specific goods, in this case, glass sealant mixing and metering dispensers. The Act, as amended, allows the Chief Executive Officer of Customs to make Tariff Concession Orders (TCOs) that apply lower rates of customs duty to goods specified in the order. The policy objective behind this instrument is to ensure that such concessions are granted when no substitutable goods are produced in Australia, thereby fostering competitive advantages for Australian businesses and potentially lowering costs for consumers.
The instrument was introduced following an application by Lisec Australia Pty Ltd, which sought a TCO for certain glass sealant mixing and metering dispensers. The CEO of Customs was satisfied that the application met the core criteria stipulated in the Act, leading to the issuance of TCO No. 1017720. This order effectively declared that the specified dispensers would benefit from a tariff rate of free, down from the general rate of 5%. The instrument came into force on the date the application was lodged, 16 April 2010, and no submissions were received in opposition to the order. Importantly, the TCO does not affect the rights of persons, other than the Commonwealth, in respect of anything done before the date of registration, and it imposes no liabilities on any person.
Scope and Application
The Tariff Concession Instrument No. 1017720 under the Customs Act 1901 applies to individuals or entities that have applied for and received a Tariff Concession Order (TCO) for specified goods. This particular TCO No. 1017720, made on 9 July 2010, pertains to certain glass sealant mixing and metering dispensers, granting them a free rate of duty as opposed to the general rate of 5%. The TCO was issued following an application by Lisec Australia Pty Ltd on 16 April 2010 and is effective from that date. The scope of this legislation is limited to the reduction of customs duty on specified goods, provided that no substitutable goods are produced in Australia, as per the core criteria outlined in the Act. The CEO of Customs must ensure that the application does not involve goods that cannot be subject to a TCO, as specified in section 269SJ of the Act. The instrument extends to the national level, impacting all importers of the specified goods across Australia. There are no reported exclusions or exemptions within this particular TCO, and the application does not extend or restrict through subordinate instruments beyond the specified goods and the conditions outlined in the TCO.
Key Provisions
The key operative sections of the Customs Act 1901, particularly as it pertains to Tariff Concession Orders (TCOs), include sections 269C, 269F, 269P, and 269SJ (sections 269C, 269F, 269P, and 269SJ). Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. Section 269C stipulates that the CEO must make a TCO if the application meets the core criteria, which require that no substitutable goods were produced in Australia on the day the application was lodged. Section 269P mandates that if the CEO is satisfied that the application meets these criteria, they must issue a written TCO order. Section 269SJ lists the goods that cannot be the subject of a TCO.
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person seeking a TCO must submit an application to the CEO (section 269F). The CEO must then determine whether the application meets the core criteria specified in section 269C, which involves assessing whether substitutable goods were produced in Australia on the application date (section 269D). If the CEO decides that the application meets the criteria, they must issue a written TCO order (section 269P). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made (subsection 269K(1)).
Regarding the consequences of non-compliance, the Customs Act 1901 does not explicitly detail offences or penalties for breaching the provisions related to TCOs. However, any failure to comply with the Act's requirements or the terms of a TCO could potentially lead to civil or criminal consequences under other provisions of the Act, including penalties for false declarations or fraud. Such breaches may result in fines, imprisonment, or both, depending on the severity of the offence. The specific penalties are outlined in other sections of the Act and related legislation, but they are not detailed in the context of TCOs specifically.