EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1029371
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.
Dallas Price Imports applied for a TCO in respect of certain combined refrigerator freezers on 30 June 2010.
Instrument
TCO No 1029371 was made on 30 September 2010. It declares that those certain combined refrigerator freezers 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. 1029371 is taken to have come into force on 30 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 Australian Parliament, establishes a framework under which the Chief Executive Officer (CEO) of Customs can issue Tariff Concession Orders (TCOs) that provide reduced rates of customs duty for specific goods. This legislation was introduced to address the need for a streamlined process to grant tariff concessions to importers who can demonstrate that no substitutable goods are produced in Australia. The explanatory statement accompanying Tariff Concession Instrument No. 1029371, issued on 30 September 2010, outlines the circumstances under which the CEO determined that Dallas Price Imports' application for a TCO for certain combined refrigerator freezers met the core criteria, leading to a tariff concession that lowered the duty from 5% to free. The policy objective is to facilitate trade by reducing duties for imported goods where no domestic alternatives exist, thereby benefiting importers without imposing any liabilities on other stakeholders.
Scope and Application
The Tariff Concession Instrument No. 1029371 under the Customs Act 1901 applies to goods specified in the instrument, namely certain combined refrigerator freezers, for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs. This Act pertains to the application and subsequent approval of TCOs, where a lower rate of customs duty applies to the specified goods. The application and subsequent concession are governed by the provisions of Part XVA of the Customs Act 1901, which allows for the concession of customs duty on certain goods. The application must meet the core criteria, which include the condition that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. The geographic reach of this Act is national, as it is a Commonwealth Act. The Act does not specify any exclusions or exemptions other than those set out in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The application of this Act may be further defined or extended through subordinate instruments, such as regulations or orders made under the authority of the Customs Act 1901.
Key Provisions
The Tariff Concession Order No. 1029371, made under section 269F of the Customs Act 1901, applies to certain combined refrigerator freezers (section 269C). If the Chief Executive Officer (CEO) of Customs is satisfied that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)), a written order will be made declaring that the goods are subject to a lower rate of customs duty, in this case, free of charge (section 269P(3)). The general rate of duty on these goods is 5%, but the TCO reduces this to zero.
The obligations under the Act require that an application for a Tariff Concession Order (TCO) be made by a person to the CEO, and that the CEO assess whether the application meets the core criteria (section 269F). If the application is valid, the CEO must publish a notice in the Gazette inviting submissions from any person who considers that there are reasons why the TCO should not be made (subsection 269K(1)). In this instance, no submissions were received. The CEO must also ensure that the TCO does not affect the rights of any person, other than the Commonwealth, as at the date of registration (subsection 269S(1)).
Failure to comply with the requirements of the Customs Act 1901 can result in civil and criminal penalties. The Act provides for a range of offences, including the making of a false statement, which can result in a fine of up to 10,000 penalty units or imprisonment for up to five years, or both (subsection 269V(1)). Additionally, the Act provides for the imposition of penalties for breaches of the regulations, which can include fines up to 10,000 penalty units for individuals and 50,000 penalty units for bodies corporate (section 126(2) of the Regulations). The Act also provides for the recovery of any overpaid duty, along with interest and additional penalties.
The explanatory statement for the Tariff Concession Instrument No. 1029371 outlines the legislative framework under which the TCO was made, the specific provisions that apply to the goods in question, and the obligations and requirements imposed on the parties involved. The TCO provides a lower rate of customs duty for certain combined refrigerator freezers, with no substitutable goods produced in Australia. The CEO must assess the application against the core criteria and ensure that the TCO does not affect the rights of any person. Failure to comply with the Act can result in civil and criminal penalties, including fines and imprisonment.