EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1019866
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.
Anthony Innovations Pty Ltd applied for a TCO in respect of certain wardrobe door rollers on 30 April 2010.
Instrument
TCO No 1019866 was made on 19 July 2010. It declares that those certain wardrobe door rollers 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. 1019866 is taken to have come into force on 30 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. 1019866, enacted in 2010, was developed under the Customs Act 1901 to address the need for tariff concessions on specific imported goods, enhancing the flexibility of the tariff system to respond to market demands and economic conditions. This instrument was introduced to provide a lower rate of customs duty on certain goods, in this case, wardrobe door rollers, where no substitutable goods were produced in Australia. The policy objective of this legislation is to ensure that Australian businesses can access goods at a reduced tariff rate, which may help in maintaining competitive pricing and supporting local industries that do not produce these specific goods domestically.
The instrument was enacted by the Commonwealth of Australia, through the Chief Executive Officer of Customs, who is mandated to consider applications for tariff concessions and make written orders based on the criteria set out in the Customs Act 1901. In this instance, Anthony Innovations Pty Ltd successfully applied for a tariff concession on wardrobe door rollers, resulting in a significant reduction in duty from 5% to free. The process involved public consultation, which in this case did not elicit any submissions opposing the concession, and the concession took effect from the date of application, 30 April 2010.
Scope and Application
The Customs Act 1901, under its Part XVA, establishes a framework for the Chief Executive Officer of Customs to create Tariff Concession Orders (TCOs) that apply reduced customs duty rates to specific goods. An entity or individual can apply to the CEO for a TCO for goods, provided they do not fall under the restricted categories outlined in section 269SJ of the Act. The CEO assesses the application against the core criteria, particularly focusing on whether substitutable goods are produced in Australia, as defined in section 269D, and whether such production occurs in the ordinary course of business as per section 269E. If the application satisfies these criteria, a TCO is issued, effectively applying a specified lower duty rate from the date of the application. The TCOs do not retroactively affect the rights of any person, except the Commonwealth, and do not impose new liabilities on any party. Instead, they potentially benefit importers by allowing them to apply for duty refunds on goods imported since the TCO's effective date.
Key Provisions
The Tariff Concession Instrument No. 1019866, made under section 269F of the Customs Act 1901, provides a concession on the customs duty for certain wardrobe door rollers. Section 269F of the Act allows for the application of a Tariff Concession Order (TCO) by a person seeking a lower rate of customs duty on goods. If the Chief Executive Officer of Customs (CEO) determines that the application meets the core criteria, as outlined in section 269C, a TCO can be made. Specifically, section 269C states that an application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business.
The obligations imposed on parties under this Act are primarily on the CEO. Upon receiving a valid TCO application, the CEO must ensure that the application meets the core criteria by verifying that no substitutable goods were produced in Australia at the time of application. If the CEO is satisfied that the application meets these criteria, they are required to make a written TCO. Additionally, as per section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made. The CEO must consider these submissions before deciding whether to proceed with the TCO.
Failing to comply with the requirements of the Act or the TCO can lead to various consequences. Although the explanatory statement does not detail specific offences or penalties for breaches, the Customs Act 1901 generally provides for civil and criminal penalties for non-compliance with customs regulations. These penalties can include fines and imprisonment, depending on the severity and intent behind the breach. The exact penalties would be determined by the courts based on the specific circumstances of the breach. It is essential for entities and individuals to adhere to the provisions of the Act and the terms of the TCO to avoid any adverse legal consequences.