EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1041558
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.
Blum Australia applied for a TCO in respect of certain drawer glass slides on 09 September 2010.
Instrument
TCO No 1041558 was made on 29 November 2010. It declares that those certain drawer glass slides 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. 1041558 is taken to have come into force on 09 September 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, establishes a framework for the administration of customs duties and includes provisions for the creation of Tariff Concession Orders (TCOs) under Part XVA. The primary problem this legislation addresses is the facilitation of tariff concessions for certain goods, ensuring that businesses can apply for lower customs duties where applicable, thereby potentially reducing costs and increasing competitiveness without the need for extensive legislative amendments each time. The policy objective is to streamline the process by which businesses can access tariff concessions, ensuring that such concessions are granted in a timely and transparent manner, with opportunities for public consultation provided where necessary. This approach aids in promoting trade and economic efficiency while maintaining fiscal integrity.
Scope and Application
The Tariff Concession Instrument No. 1041558, made under the Customs Act 1901, pertains to the application of tariff concessions on certain drawer glass slides. This legislation applies to Blum Australia, the entity that applied for the tariff concession, and to any person or entity importing these specific goods into Australia. The instrument provides for a lower rate of customs duty, specifically a free rate instead of the general 5% duty, on the designated goods, provided they meet the core criteria as stipulated in section 269C of the Act. The geographic reach of this legislation is national, as it applies across Australia, governed by the Commonwealth. The Act excludes certain goods from tariff concessions as outlined in section 269SJ, but these particular drawer glass slides do not fall under that exclusion. The instrument also allows for the extension or restriction of application through subordinate instruments, although none are specified in this instance. The instrument's effect is limited to the rights of importers, who will be able to apply for duty refunds on goods imported since the day the instrument is deemed to have come into force, without imposing any liabilities on other persons.
Key Provisions
The Customs Act 1901 (the Act) provides for the making of Tariff Concession Orders (TCOs) through Part XVA, which facilitates the application of a lower rate of customs duty on specific goods. Under section 269F, a person can apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of goods. If the CEO determines that the application is not for goods specified in section 269SJ—those that cannot be subject to a TCO—they must assess whether the application meets the core criteria outlined in section 269C. This assessment hinges on whether, on the date the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business, as defined by sections 269D and 269E.
If the CEO is satisfied that the application meets these core criteria, they are mandated by subsection 269P(3) to issue a written order (a TCO) that declares the goods in question to be subject to a specified item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). This was the case with Blum Australia's application for a TCO concerning certain drawer glass slides, which was made on 29 November 2010. The TCO declared that these drawer glass slides were subject to item 50 of Schedule 4 of the Tariff, with the general duty rate on these goods being 5% and the duty rate for goods subject to the TCO being free.
The Act imposes certain obligations on the CEO in relation to TCO applications. For instance, under subsection 269K(1), the CEO must publish a notice in the Gazette as soon as practicable after accepting a TCO application as valid. This notice includes an invitation for any person who believes there are reasons why the TCO should not be made to lodge a submission with the CEO. In the case of TCO No. 1041558, the CEO did not receive any such submissions. Additionally, under subsection 269S(1), a TCO is deemed to come into force on the day on which the application for the TCO was lodged, which in this case was 09 September 2010.
Failing to comply with the provisions of the Act can lead to civil or criminal consequences. While the Act does not specify penalties for non-compliance with the TCO provisions, general provisions of the Customs Act may apply. For example, subsection 134(1) provides that any person who contravenes the Act is liable to a penalty not exceeding 10,000 penalty units or, in the case of a corporation, five times that amount. In addition to financial penalties, criminal proceedings can be initiated, potentially leading to imprisonment. The specifics of these penalties would depend on the nature and severity of the breach.