EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1030677
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.
Deluxe Products applied for a TCO in respect of certain saunas on 07 July 2010.
Instrument
TCO No 1030677 was made on 29 September 2010. It declares that those certain saunas 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. 1030677 is taken to have come into force on 07 July 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 enacted to regulate and manage customs and excise duties in Australia, ensuring revenue collection and providing protection for domestic industries. Part XVA of the Act introduces a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This allows for a lower rate of customs duty on goods specified in a TCO, provided certain criteria are met. The policy objective is to facilitate the importation of goods that are not produced in Australia, thereby benefiting consumers and potentially encouraging the domestic production of such goods. Deluxe Products applied for a TCO concerning certain saunas on 7 July 2010, which was granted on 29 September 2010. The instrument, TCO No. 1030677, applies these saunas to item 50 of Schedule 4 of the Customs Tariff Act 1995, reducing the duty from 5% to free. The TCO became effective on the date the application was lodged, 7 July 2010, and no submissions were received against it.
Scope and Application
The Customs Act 1901, as outlined in Tariff Concession Instrument No. 1030677, pertains to applications for Tariff Concession Orders (TCOs) made by the Chief Executive Officer of Customs. This Act applies to individuals or entities seeking to import goods that are not produced in Australia in the ordinary course of business and which do not fall under the prohibited categories specified in section 269SJ. The application process involves satisfying core criteria under sections 269C and 269D, ensuring that the goods in question are not substitutable by Australian-produced goods. Once approved, a TCO grants a tariff concession, effectively setting the customs duty rate to zero for the specified goods, thereby benefiting the importers who can also apply for duty refunds on previously imported goods under Regulation 126(1)(r). This legislation operates nationally across Australia and is not restricted by state or territory boundaries, though its application can be extended or refined through subordinate instruments. Notably, the Act does not disadvantage any person by affecting their rights as they stood on the date of registration nor does it impose liabilities on anyone for actions taken prior to the registration of the TCO.
Key Provisions
The Customs Act 1901 (the Act) establishes a framework for the creation of Tariff Concession Orders (TCOs) under Part XVA. A TCO allows for a lower rate of customs duty to be applied to specified goods, which are outlined in a written order made by the Chief Executive Officer of Customs (the CEO). Section 269F of the Act allows a person to apply to the CEO for a TCO concerning certain goods. The CEO is obligated to consider whether the application meets the core criteria specified 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.
The Act imposes several obligations on the parties involved. The CEO must decide if an application meets the core criteria (section 269C), and if satisfied, the CEO must make a written order (section 269P(3)). Additionally, under section 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. This ensures transparency and provides an opportunity for interested parties to voice their concerns. For Deluxe Products, the obligation was to apply for a TCO and provide the necessary information for the CEO to assess the application against the core criteria.
There are specific consequences for non-compliance or improper application of TCOs. While the Act does not explicitly outline civil or criminal penalties for breach, it is reasonable to infer that any misuse or improper application of a TCO could result in penalties under the broader customs regulations, potentially including fines or other administrative actions. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any new liabilities on individuals or entities.
Tariff Concession Order No. 1030677, made on 29 September 2010, declared that certain saunas are subject to a free rate of duty under item 50 of Schedule 4 to the Customs Tariff Act 1995, following a valid application by Deluxe Products. This TCO came into force on 7 July 2010, the date the application was lodged, as stipulated in section 269S(1) of the Act. Importers of these goods will benefit from this concession, potentially applying for a refund of duty on goods imported since the effective date of the TCO. Importantly, the TCO does not impose any new liabilities on any person and does not disadvantage anyone other than the Commonwealth.