EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1033690
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.
Daniels International Pty Ltd applied for a TCO in respect of certain waste bins on 22 July 2010.
Instrument
TCO No 1033690 was made on 11 October 2010. It declares that those certain waste bins 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.
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. 1033690 is taken to have come into force on 22 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 the import and export of goods in Australia, providing a framework for the imposition of customs duty on imported goods. To address the issue of encouraging the production of goods within Australia, the Act allows for the creation of Tariff Concession Orders (TCOs) under section 269F, which provide a lower rate of customs duty for certain goods. This instrument, Tariff Concession Instrument No. 1033690, was introduced to offer tariff concessions on specific waste bins, as applied by Daniels International Pty Ltd on 22 July 2010. The policy objective is to ensure that no substitutable goods are produced in Australia, thereby supporting local production and potentially benefiting importers by allowing them to claim refunds for duties paid on goods imported since the TCO came into force on 22 July 2010. This measure was enacted by the Parliament of Australia and is intended to foster domestic manufacturing and trade efficiency within the framework established by the Customs Act 1901.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the application for Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs, who can reduce the customs duty on certain goods upon meeting specified criteria. The application process requires the applicant to demonstrate that no substitutable goods are produced in Australia in the ordinary course of business, which is defined by various sections of the Act. Upon satisfaction of these core criteria, a TCO is issued, granting the specified goods a lower rate of customs duty as outlined in the Customs Tariff Act 1995. The TCO does not adversely affect the rights of any individual or entity, except for the Commonwealth, and it does not impose any liabilities for actions taken before the TCO’s registration date. Any person who considers there are reasons why a TCO should not be made has the opportunity to lodge a submission with the CEO following the publication of the application in the Gazette. This legislative framework ensures that the application and impact of TCOs are transparent and subject to public consultation.
Key Provisions
The Customs Act 1901, specifically under Part XVA, establishes a framework for Tariff Concession Orders (TCOs), as referenced in sections 269F, 269C, 269B, and 269P. Section 269F allows an individual or entity to apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning specific goods. If the application is not disqualified under section 269SJ, the CEO must then evaluate whether the application meets the core criteria outlined in section 269C. This assessment hinges on whether substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged, as defined by sections 269D and 269E. If the CEO confirms that no such substitutable goods were produced, they must issue a written order under section 269P(3) declaring the goods subject to a prescribed tariff concession.
Entities subject to the Act, including applicants for TCOs, must ensure their applications comply with the specified criteria and procedures. This involves demonstrating that the goods in question are not substitutable by Australian-produced items and that they meet the definitions of 'goods produced in Australia' and 'ordinary course of business'. The CEO also has a responsibility to publish notices in the Gazette, inviting submissions from interested parties before deciding on the application, as per subsection 269K(1). Furthermore, TCOs are deemed to come into force on the day the application is lodged, as stated in subsection 269S(1).
The Act delineates specific consequences for non-compliance or breaches. While the TCO does not disadvantage or impose liabilities on any person other than the Commonwealth, failure to adhere to the application procedures or misrepresent information could result in the CEO denying the TCO. No specific penalties are mentioned in the explanatory statement for breaches of the Act or its regulations regarding TCOs, but general legal consequences for misrepresentation or non-compliance with Commonwealth legislation may apply. These could include fines, legal action, or other penalties as prescribed by relevant laws.