EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1034153
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.
Lincoln Group Pty Ltd applied for a TCO in respect of certain ironing centres on 26 July 2010.
Instrument
TCO No 1034153 was made on 18 October 2010. It declares that those certain ironing centres 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. 1034153 is taken to have come into force on 26 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 Tariff Concession Instrument No. 1034153, enacted under the Customs Act 1901, aims to provide tariff concessions for specific goods, in this case, certain ironing centres, by granting a lower rate of customs duty. The instrument was introduced to address the issue of applying lower customs duty rates on imported goods when there are no substitutable goods produced in Australia. The Tariff Concession Orders (TCOs) are issued by the Chief Executive Officer of Customs, who must ensure the application meets core criteria before making a decision. This instrument was introduced by the Australian Government and seeks to provide relief to importers by ensuring they do not incur unnecessary tariffs on goods where local alternatives do not exist, thereby facilitating trade and economic efficiency. The instrument came into force on the date the application was lodged, 26 July 2010, and does not disadvantage any person other than the Commonwealth.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the creation and application of Tariff Concession Orders (TCOs) for certain goods. These orders, which are made by the Chief Executive Officer of Customs, apply to goods that are not already specified in section 269SJ of the Act and meet the core criteria outlined in section 269C. This criterion requires that, on the day the application is lodged, no substitutable goods are produced in Australia in the ordinary course of business. Such orders effectively reduce the rate of customs duty on the specified goods. The legislation extends to the entire Commonwealth of Australia and applies to any person or entity seeking a tariff concession for specific goods. The application process involves an invitation for public submissions after a notice is published in the Gazette, although in the case of TCO No. 1034153, no submissions were received. The order takes effect from the date the application was lodged, and it does not disadvantage any person or impose liabilities for actions taken before its registration. This particular order, TCO No. 1034153, pertains to certain ironing centres, declaring them as goods to which a specific item in Schedule 4 of the Customs Tariff Act 1995 applies, resulting in a duty rate of free instead of the general rate of 5%.
Key Provisions
The Customs Act 1901 provides a framework for Tariff Concession Orders (TCOs) that allow for lower rates of customs duty on certain goods. Under section 269F, any person can apply to the Chief Executive Officer of Customs (the CEO) for a TCO on goods that are not prohibited by section 269SJ. If the CEO determines that the application meets the core criteria, they must issue a TCO. The core criteria are outlined in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged, where 'substitutable goods' are defined in section 269E as those that can be put to the same use as the goods in question. The CEO must also consider whether the goods are produced in Australia as per section 269D.
The obligations imposed by the Act on parties involved include the requirement for applicants to ensure their applications meet the core criteria. The CEO must review applications, consult with relevant stakeholders, and make a decision within the specified timelines. Under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit objections if they believe the TCO should not proceed. This ensures transparency and provides an opportunity for public input. The CEO's decision to issue or not issue a TCO must be based on the evidence presented and the criteria outlined in the Act.
Failure to comply with the provisions of the Customs Act 1901 can result in significant consequences. While specific offences and penalties are not detailed in the explanatory statement, breaches of the Act can lead to civil and criminal penalties. For example, under section 235, the CEO can impose fines for false or misleading statements made in an application for a TCO. The maximum penalties for such offences can be substantial, reflecting the seriousness of non-compliance with customs regulations. Additionally, any person found to be in breach of the Act may face legal action, further underscoring the importance of adhering to the stipulated requirements.