EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1046471
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 15 October 2010.
Instrument
TCO No 1046471 was made on 07 January 2011. 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. 1046471 is taken to have come into force on 15 October 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 Australian Parliament, establishes the framework for the regulation of customs and excise, including the imposition of customs duty on imported goods. To address the need for flexibility in applying tariffs and to support economic development, the Act includes provisions for Tariff Concession Orders (TCOs), which can reduce or eliminate customs duty on certain goods. These provisions allow the Chief Executive Officer of Customs to grant tariff concessions where specific criteria are met, such as when no substitutable goods are produced in Australia. The objective of this legislative instrument, Tariff Concession Instrument No. 1046471, is to facilitate the import of certain misting fans by applying a free rate of duty, thereby benefiting importers and potentially supporting market competition and consumer access to affordable goods. This instrument was made under the authority granted by the Customs Act and came into effect on the date the application was lodged, 15 October 2010.
Scope and Application
The Customs Act 1901, as modified by Tariff Concession Instrument No. 1046471, provides a framework for the Chief Executive Officer of Customs to grant tariff concessions on specific goods. This Act applies to entities or individuals who wish to import goods that can benefit from a lower customs duty rate. This reduction in duty applies to goods that are the subject of a Tariff Concession Order (TCO), which is issued by the CEO under section 269F. The Act applies nationally and is governed by the Commonwealth of Australia, providing a uniform approach across the country. Notably, the application for a TCO is subject to certain exclusions, specifically those outlined in section 269SJ of the Act, which lists goods ineligible for concession. The core criteria for a TCO, as stipulated in section 269C, require that no substitutable goods are produced in Australia on the date the application is lodged, ensuring that the concession supports imports where no local production exists. The instrument does not impose any retroactive liabilities and does not disadvantage any person, as clarified by subsection 269S(1), which establishes the effective date of the TCO as the day the application was lodged.
Key Provisions
The main operative sections of the Customs Act 1901 (the Act) pertinent to the Tariff Concession Order (TCO) No 1046471 include section 269C, which specifies that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. This is further clarified by sections 269D and 269E which define the terms ‘goods produced in Australia’ and ‘ordinary course of business’, respectively. Additionally, section 269P(3) mandates that if the Chief Executive Officer of Customs (the CEO) is satisfied that an application meets the core criteria, they must make a written order declaring the goods to which the TCO applies. Section 269SJ, in turn, sets out the goods that cannot be subject to a TCO.
The obligations and requirements imposed by the Act on parties or entities governed by it include the necessity for applicants, such as Bunnings Group Ltd, to ensure their applications meet the core criteria as defined by sections 269C, 269D, and 269E. The CEO must also act promptly in assessing applications and, if the core criteria are satisfied, issue a written TCO. Moreover, the CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties, as outlined in section 269K(1). This transparency measure ensures that any objections to the TCO can be considered before it is finalised.
Failure to comply with the requirements set out by the Act may result in legal consequences. Although the explanatory statement does not explicitly mention offences, penalties, or civil/criminal consequences, the Act generally allows for enforcement actions against entities that fail to adhere to its provisions. For instance, if a TCO is issued erroneously, the CEO could face repercussions for not adhering to the criteria stipulated by sections 269C, 269D, and 269E. Similarly, applicants might face consequences if their applications are found to be in breach of the specified conditions. However, specific penalties or the exact nature of the consequences are not detailed in the explanatory statement provided.