EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1049591
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 Sentry Group Pty Ltd applied for a TCO in respect of certain temporary support jacks for ceilings and/or walls and/or cabinets on 08 November 2010.
Instrument
TCO No 1049591 was made on 31 January 2011. It declares that those certain temporary support jacks for ceilings and/or walls and/or cabinets 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. 1049591 is taken to have come into force on 08 November 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, establishes a framework for tariff concession orders (TCO) to provide relief on customs duty for certain goods. This Act was designed to address the need for a streamlined process to provide tariff concessions on goods that are not produced domestically. Specifically, Part XVA of the Act allows the Chief Executive Officer of Customs to grant lower duty rates on goods subject to a TCO, provided the application meets the core criteria outlined in section 269C of the Act. This includes ensuring that no substitutable goods are produced in Australia at the time of the application, as per section 269P(3). The policy objective is to encourage the importation of goods that are not locally manufactured, thereby benefiting importers by reducing their duty costs.
The Tariff Concession Instrument No. 1049591, issued on 31 January 2011, is an example of this process in action. It pertains to certain temporary support jacks for ceilings, walls, and cabinets. The CEO of Customs granted the concession after confirming that no equivalent goods were produced in Australia, thereby ensuring the concession would not undermine local production. This specific TCO has no retrospective effect, protecting the rights of importers who may apply for duty refunds on goods imported since the TCO's effective date of 08 November 2010.
Scope and Application
The Customs Act 1901, specifically under its Part XVA, provides the framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to entities or individuals who seek tariff concessions for specific goods, ensuring that these goods are not substitutable by products manufactured in Australia. The scope of the Act is national, as it is a Commonwealth Act, and it applies to all entities and individuals involved in the import of the specified goods within Australia. Exclusions to the application of this Act include goods specified in section 269SJ, which are ineligible for tariff concessions. The Act can be extended or restricted through subordinate instruments, allowing for detailed regulation and specific implementation of tariff concessions. The tariff concession granted under Instrument TCO No. 1049591 for temporary support jacks is an example of how the Act operates to benefit importers by reducing the duty rate from 5% to free, provided no substitutable goods are produced domestically.
Key Provisions
The primary operative sections of this legislation, as outlined in the Customs Act 1901, involve the creation and application of Tariff Concession Orders (TCOs) (sections 269C, 269F, and 269P). A Tariff Concession Order is a written directive issued by the Chief Executive Officer of Customs (CEO) that allows for a lower rate of customs duty on specified goods (section 269P(3)). The core criteria for such an order, as stated in section 269C, include the condition that no substitutable goods were produced in Australia at the time the application was lodged. The specific definition of terms like 'substitutable goods' and 'ordinary course of business' are provided in sections 269D and 269E. When these criteria are met, the CEO is obligated to issue a TCO (section 269P(3)).
The obligations imposed by this legislation on the parties involved are primarily on the CEO, who must ensure that applications for TCOs meet the core criteria set out in the Act. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not proceed (subsection 269K(1)). The CEO in this instance did not receive any submissions opposing the TCO. Furthermore, the legislation ensures that the rights of persons, other than the Commonwealth, will not be adversely affected by the TCO (subsection 269S(1)).
Breaching the conditions set by the Customs Act 1901 could lead to both civil and criminal consequences. However, the explanatory statement does not provide specific details on offences or penalties for breaching the conditions of the TCO. The act of applying for a TCO without meeting the core criteria could lead to the application being denied, but the exact penalties for such breaches are not specified within the provided text.
The Tariff Concession Order No. 1049591 specifically relates to certain temporary support jacks for ceilings, walls, and cabinets, which are now subject to a duty rate of free, as opposed to the general rate of 5% (item 50 of Schedule 4 to the Customs Tariff Act 1995). The CEO was satisfied that no substitutable goods were produced in Australia, thus fulfilling the core criteria for issuing the TCO.
The TCO does not affect the rights of any person (other than the Commonwealth) as at the date of registration, ensuring that no person is disadvantaged or imposed with liabilities in respect of actions taken before the TCO was issued (subsection 269S(1)). Importers of the specified goods will have the right to apply for a refund of duty on goods imported since the TCO came into force, which is the date the application was lodged, in this case, 08 November 2010 (paragraph 126(1)(r) of the Regulations). The TCO also does not impose any liabilities on any person.