EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1043462
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.
Bunnings Group Ltd applied for a TCO in respect of certain misting fans on 22 September 2010.
Instrument
TCO No 1043462 was made on 23 December 2010. It declares that those certain misting fans 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. 1043462 is taken to have come into force on 22 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 Tariff Concession Instrument No. 1043462, enacted in 2010, is an instrument under the Customs Act 1901 designed to address the specific need for tariff concessions on certain imported goods. This instrument was introduced to provide relief to businesses by allowing the Chief Executive Officer of Customs to grant tariff concessions on goods that do not have substitutable Australian-made alternatives. The primary objective of this instrument, as outlined in the explanatory statement, is to ensure that the application process for tariff concessions is transparent and allows for public input. The instrument came into force on the date of the application, 22 September 2010, and does not retroactively affect any pre-existing rights or liabilities, thus protecting the interests of importers and other stakeholders.
Scope and Application
The Customs Act 1901, specifically under Part XVA, allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO), providing lower rates of customs duty on certain goods. Any person may apply for a TCO, but the CEO must ensure that the goods in question are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If an application is deemed valid, the CEO must make a written order applying a prescribed rate of duty from Schedule 4 to the Customs Tariff Act 1995. In the case of Tariff Concession Instrument No. 1043462, certain misting fans are granted a concession, resulting in a duty rate of free, down from the general rate of 5%. This legislation applies on a Commonwealth level, and the application of a TCO is contingent on the CEO being satisfied that no substitutable goods were produced in Australia at the time of application. The TCO does not affect existing rights or impose liabilities on any person for actions taken prior to its registration.
Key Provisions
The primary operative sections of this legislation are sections 269C, 269F, and 269P of the Customs Act 1901, which establish the framework for Tariff Concession Orders (TCOs). Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the application is deemed valid, the CEO must determine whether it meets the core criteria outlined in section 269C. If the CEO is satisfied that no substitutable goods were produced in Australia on the date the application was lodged, the CEO must then make a written TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
Under the Act, the CEO has the obligation to assess TCO applications to ensure they meet the core criteria, including verifying that no substitutable goods were produced in Australia in the ordinary course of business. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes there are reasons why the TCO should not be made. The CEO is required to consider these submissions before making a final decision. In this instance, no submissions were received, leading to the issuance of TCO No 1043462.
Any breaches of the provisions under the Customs Act 1901 can result in various civil and criminal consequences. Specifically, making false statements or providing misleading information in an application for a TCO can lead to penalties. Under section 269V of the Act, the CEO can impose a penalty of up to $11,000 for providing misleading information in an application. If the offence is committed by a body corporate, the maximum penalty can be significantly higher, reaching up to $550,000. These penalties underscore the importance of accuracy and integrity in the application process.
In summary, TCO No 1043462 provides relief from customs duty for certain misting fans, aligning with the statutory requirements for applications and assessments under the Customs Act 1901. The legislation clearly outlines the process for TCO applications, the CEO's obligations, and the potential penalties for non-compliance. This ensures a fair and transparent system for tariff concessions while protecting the interests of all stakeholders involved.