EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1043663
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.
The Decor Corporation applied for a TCO in respect of certain drinking bottles on 23 September 2010.
Instrument
TCO No 1043663 was made on 13 December 2010. It declares that those certain drinking bottles 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. 1043663 is taken to have come into force on 23 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 Parliament of Australia, provides a framework for managing customs duties and includes a scheme for Tariff Concession Orders (TCOs). This legislative instrument, F2011L00022, addresses the need for a streamlined process for tariff concessions on certain imported goods by allowing the Chief Executive Officer of Customs to reduce or eliminate customs duty rates for specific goods under particular conditions. The policy objective is to facilitate trade by reducing the financial burden on importers of certain goods, provided that there are no substitutable goods produced in Australia. This approach aims to encourage the importation of goods that are not domestically produced, thus supporting market access and potentially lowering consumer prices. The instrument was introduced to fill the gap in providing tariff relief for goods where no suitable Australian alternatives exist, thereby supporting economic efficiency and consumer welfare.
Scope and Application
The Tariff Concession Instrument No. 1043663, established under Part XVA of the Customs Act 1901, applies to the procedures and criteria for granting Tariff Concession Orders (TCO) by the Chief Executive Officer of Customs. This instrument specifically relates to the application submitted by The Decor Corporation for certain drinking bottles, where the CEO determined that a TCO was appropriate as no substitutable goods were being produced in Australia. The instrument grants these specified goods a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995, as opposed to the general rate of 5% duty. The Act applies to any person or entity seeking a TCO for goods, provided the goods are not specified in section 269SJ of the Act, which lists those ineligible for such concessions. The CEO's decision to grant a TCO is based on satisfying the core criteria outlined in sections 269C, 269B, and 269D of the Customs Act 1901. This instrument's jurisdictional reach is national, as it operates under the authority of the Commonwealth and its provisions apply across Australia. The instrument does not affect the rights of any person other than the Commonwealth and does not impose any liabilities on any person for actions taken prior to the registration of the TCO.
Key Provisions
The Customs Act 1901 (the Act) contains provisions that allow for the creation of Tariff Concession Orders (TCOs) through Part XVA. Section 269F allows individuals or entities to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods. If the application is deemed valid and does not pertain to goods specified in section 269SJ, the CEO evaluates whether the application meets the core criteria outlined in section 269C. A TCO application meets these criteria if, on the date of application, 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 criteria, they must make a written order, a TCO, declaring that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995.
The obligations imposed by the Act on parties applying for a TCO include ensuring that the application is valid and that it pertains to goods that are not specified in section 269SJ of the Act. The CEO is required to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, as per subsection 269K(1). The CEO must also ensure that the TCO does not adversely affect the rights of any person other than the Commonwealth or impose any liabilities on them regarding actions taken before the TCO's effective date, as stipulated in subsection 269S(1).
Breaching the provisions of the Act that relate to TCOs can result in various penalties and consequences. While the explanatory statement does not detail specific offences or penalties under the Act, it is reasonable to infer that breaches of the core criteria for TCO applications or misrepresentation of facts could lead to civil or criminal consequences. Penalties for such breaches may include fines or other sanctions as prescribed by the relevant sections of the Act. The maximum penalties for such breaches would be determined based on the severity of the offence and the specific provisions of the Act that have been violated.