EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1027134
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.
Foga Systems Australia applied for a TCO in respect of certain panel framing system channel connectors on 18 June 2010.
Instrument
TCO No 1027134 was made on 06 September 2010. It declares that those certain panel framing system channel connectors 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. 1027134 is taken to have come into force on 18 June 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 Customs Act 1901 was amended by Tariff Concession Instrument No. 1027134 to address the need for tariff concessions on specific goods that are not produced in Australia. Enacted by the Australian Parliament, this legislation provides a mechanism for the Chief Executive Officer of Customs to grant tariff concessions on goods that are not domestically produced, thereby ensuring that Australian consumers and businesses are not burdened with unnecessary customs duties. The policy objective is to facilitate the import of goods that are not locally available, thereby enhancing competition and consumer choice while avoiding any disadvantage to existing rights or imposition of new liabilities on individuals or entities. The instrument came into effect on 18 June 2010, following an application by Foga Systems Australia for tariff concessions on certain panel framing system channel connectors, which were subsequently granted as no substitutable goods were produced in Australia.
Scope and Application
The Customs Act 1901, as amended, outlines a framework through which Tariff Concession Orders (TCOs) can be issued by the Chief Executive Officer of Customs. This legislation specifically applies to individuals or entities seeking to import goods that are eligible for reduced customs duty under certain conditions. The Act applies to any person or entity that applies for a TCO in respect of goods, provided that these goods are not specified in section 269SJ of the Act, which lists goods ineligible for tariff concessions. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia at the time of application, thereby meeting the core criteria outlined in section 269C. The TCOs have a national reach, applying across Australia in accordance with the Customs Act 1901, which is a Commonwealth Act. The application and subsequent concession are governed by the provisions set out in the Customs Act 1901 and the Customs Tariff Act 1995. The legislation does not explicitly state any exclusions or thresholds beyond those outlined in section 269SJ; however, the scope of application can be extended or restricted through subordinate instruments issued by the CEO of Customs.
Key Provisions
The primary operative sections of this legislation (sections 269C, 269B, 269E, 269D, 269P(3), and 269F) outline the process by which Tariff Concession Orders (TCOs) can be made and applied to certain goods, effectively reducing their customs duty. Specifically, section 269F allows an individual to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the CEO is satisfied that the application does not pertain to goods specified in section 269SJ and meets the core criteria as per section 269C, they must make a written TCO order, declaring that the goods in question are subject to a specific item of Schedule 4 to the Customs Tariff Act 1995. The definitions of key terms such as ‘goods produced in Australia’, ‘ordinary course of business’, and ‘substitutable goods’ are provided in sections 269D, 269E, and 269B respectively.
The Act imposes several obligations on parties and entities it governs. Firstly, section 269K(1) mandates that the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any person who believes the TCO should not be made to lodge a submission with the CEO. This ensures a level of transparency and opportunity for stakeholders to voice their concerns. Additionally, the Act ensures that the TCO does not disadvantage any person (other than the Commonwealth) or impose liabilities on any person in respect of anything done or omitted to be done before the date of registration, as per subsection 269S(1).
In terms of consequences for breach, the explanatory statement does not explicitly detail specific offences, penalties, or civil/criminal consequences for non-compliance with the Act. However, it is reasonable to infer that any failure to adhere to the stipulated processes and requirements, such as improper application or submission of misleading information, could lead to denial of the TCO application or other administrative actions taken by the CEO of Customs. The exact nature and severity of these consequences would likely be guided by other relevant laws and regulations governing administrative procedures and potential misconduct.