EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1028496
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.
Hills Industries Limited applied for a TCO in respect of certain outdoor playground equipment on 25 June 2010.
Instrument
TCO No 1028496 was made on 20 September 2010. It declares that those certain outdoor playground equipment 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. 1028496 is taken to have come into force on 25 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, enacted by the Commonwealth Parliament, provides a framework for the administration of customs and excise duties, including the mechanism for Tariff Concession Orders (TCOs) which allow for reduced rates of duty on certain goods. This legislation addresses the gap in providing relief to industries that face competitive disadvantages due to the absence of local production of substitutable goods. The policy objective behind the introduction of TCOs is to encourage the import of goods that are not produced domestically, thus promoting competition and potentially lowering consumer prices. Tariff Concession Instrument No. 1028496, made under this Act, is an example of the application of these provisions, granting free duty on certain outdoor playground equipment as no substitutable goods were produced in Australia, thus facilitating access to these goods for the benefit of importers and consumers.
Scope and Application
The Tariff Concession Instrument No. 1028496, made under the Customs Act 1901, applies to the specific outdoor playground equipment as designated by Hills Industries Limited, who applied for the tariff concession on 25 June 2010. The instrument operates within the Commonwealth jurisdiction and aims to provide a tariff concession order (TCO) which reduces the duty on these goods from the general rate of 5% to free, provided that the CEO is satisfied no substitutable goods are produced in Australia. The instrument does not impose any liabilities or disadvantage any person except for the Commonwealth and does not affect pre-existing rights negatively. It is also noted that the instrument extends its reach through the Customs Tariff Act 1995, as referenced in Schedule 4, item 50. The instrument came into force on the date of the application, 25 June 2010, and does not require further subordinate legislation for its enforcement.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides a framework for Tariff Concession Orders (TCOs) which are instruments that can lower the rate of customs duty on certain goods. Section 269F allows any person to apply to the Chief Executive Officer (CEO) of Customs for a TCO, provided the goods in question are not those specified in section 269SJ, which are ineligible for TCOs. For an application to be considered, it must meet the core criteria set out in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged.
Subsection 269P(3) of the Act mandates that if the CEO is satisfied that the application meets these criteria, they must make a written order that declares the goods to which a specific item of Schedule 4 to the Customs Tariff Act 1995 applies, thereby granting the tariff concession. In this case, TCO No. 1028496 was issued on 20 September 2010, declaring that certain outdoor playground equipment, which were subject to an application by Hills Industries Limited on 25 June 2010, are goods to which item 50 of Schedule 4 applies, with the general duty rate being 5% and the concessional rate being free.
The Act imposes certain obligations on the CEO, including the requirement to publish a notice in the Gazette inviting submissions from any interested parties regarding the application. Section 269K(1) of the Act specifies that this notice must be published as soon as practicable after accepting the application as valid. In the case of TCO No. 1028496, no submissions were received in response to the published notice. Furthermore, section 269S(1) specifies that the TCO is deemed to come into force on the date the application was lodged, which for this case is 25 June 2010.
The Act also delineates the consequences for breaches, though specific offences and penalties are not outlined in the explanatory statement. Typically, the Customs Act and associated regulations provide for both civil and criminal penalties for non-compliance, including fines and imprisonment for serious breaches. The precise penalties can vary depending on the nature and severity of the breach, but they are intended to ensure adherence to the legislative requirements and to protect the integrity of the tariff concession scheme.