EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1051944
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 Hipac Group Pty applied for a TCO in respect of certain anti-ligature handrails on 23 November 2010.
Instrument
TCO No 1051944 was made on 28 February 2011. It declares that those certain anti-ligature handrails 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. 1051944 is taken to have come into force on 23 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 Australian Parliament, establishes a framework for the administration of customs and excise duties. Specifically, Part XVA of this Act allows the Chief Executive Officer of Customs to issue Tariff Concession Orders (TCOs) to provide tariff concessions on certain imported goods, subject to specific criteria. This legislative mechanism addresses the need to provide duty relief on goods where there are no domestic alternatives, thereby encouraging the importation of goods that are not produced in Australia. In 2011, Tariff Concession Instrument No. 1051944 was introduced under this Act, providing a zero rate of duty on certain anti-ligature handrails, responding to an application by The Hipac Group Pty. This instrument was created to ensure that the application met the core criteria outlined in the Act, particularly that no substitutable goods were produced in Australia at the time of the application. The policy objective is to facilitate the import of goods that are not domestically produced, thereby supporting industries and consumers by reducing costs associated with importing these specific goods.
Scope and Application
The Tariff Concession Instrument No. 1051944 under the Customs Act 1901 applies to certain anti-ligature handrails by granting a tariff concession order (TCO) that effectively reduces the duty on these goods to free. This legislative instrument was specifically designed to cater to entities and individuals involved in the importation of these handrails, ensuring they benefit from a reduced customs duty rate. The scope of the Act extends to the entire Commonwealth of Australia, impacting the importation process across the nation. The Act does not apply to goods specified in section 269SJ of the Customs Act 1901, which includes certain goods that are explicitly ineligible for tariff concessions. The instrument’s application is further defined and potentially expanded through subordinate instruments, allowing for additional goods or categories to be included or excluded as needed. The commencement of this TCO is retroactive to the date the application was lodged, ensuring that any importations occurring from that date onwards are subject to the reduced duty rate.
Key Provisions
The Customs Act 1901, specifically under Part XVA, allows the Chief Executive Officer (CEO) of Customs to make Tariff Concession Orders (TCOs) (section 269F). These orders can reduce the customs duty on certain goods if an application is made and approved. The application must not be for goods specified in section 269SJ of the Act, which are excluded from TCOs. The CEO must assess whether the application meets the core criteria set out in section 269C. This includes verifying that, on the day the application was submitted, no substitutable goods were produced in Australia in the ordinary course of business (section 269C). The definitions for "goods produced in Australia," "ordinary course of business," and "substitutable goods" are provided in sections 269D, 269E, and 269P of the Act respectively.
Entities or individuals applying for a TCO must ensure that their application meets the criteria specified in the Act. The CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid (subsection 269K(1)). The CEO must consider these submissions before deciding whether to make the TCO. For the case of TCO No. 1051944 concerning anti-ligature handrails, the CEO made the order on 28 February 2011 after determining that no substitutable goods were produced in Australia on the date the application was lodged. This TCO applies item 50 of Schedule 4 to the Customs Tariff Act 1995, setting the duty rate for these goods at free, down from the general rate of 5%.
Any breach of the provisions outlined in the Customs Act 1901 could result in civil or criminal consequences. Although the explanatory statement does not specify penalties, the Act generally provides for fines and imprisonment for offences related to customs duties. The specific penalties would depend on the nature and severity of the breach, as outlined in other sections of the Act or related legislation. The Act aims to ensure that customs duties are applied correctly and fairly, and any deviations from these rules could result in significant legal repercussions for the offending party.