EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1052946
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 applied for a TCO in respect of certain household bins on 3 December 2010.
Instrument
TCO No 1052946 was made on 28 February 2011. It declares that those certain household bins 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. 1052946 is taken to have come into force on 3 December 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, provides a framework for the administration of customs duties and includes a mechanism for tariff concessions via Tariff Concession Orders (TCOs). The Act was amended to introduce the ability for the Chief Executive Officer of Customs to grant TCOs, which lower the rate of customs duty on certain goods, thereby addressing a gap in the tariff system to encourage the import of goods that are not produced domestically. The primary objective of this legislative instrument, as evidenced by the explanatory statement, is to facilitate the import of goods that do not have substitutable domestic alternatives, thus supporting market competition and potentially lowering consumer prices. In the case of TCO No 1052946, the instrument was enacted to provide a tariff concession for certain household bins, resulting in a reduction of the customs duty rate from 5% to free, effective from the date of the application, 3 December 2010.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the establishment of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs (CEO). These orders apply to goods that meet the core criteria, which include instances where no substitutable goods are produced in Australia in the ordinary course of business. The application process is initiated by a person, as outlined in section 269F of the Act, and if approved, the CEO is mandated to make a written order specifying that the goods in question are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. This process was exemplified in TCO No. 1052946, which was applied for by Lincoln Sentry on 3 December 2010 concerning certain household bins, leading to the issuance of the order on 28 February 2011, which declared these bins to be subject to item 50 of Schedule 4, thereby granting them a tariff concession with a duty rate of free, down from the general rate of 5%. The TCO applies to the specific goods from the date of the application, ensuring that any importers of these goods since that date can apply for a refund of duties paid under the higher rate.
Key Provisions
The main operative sections of this legislation pertain to the creation and enforcement of Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. The CEO must decide whether the application meets the core criteria set out in sections 269C, 269B, and 269D of the Act (section 269C). If the application is approved, the CEO is required to issue a written order declaring that the specified goods are subject to a prescribed tariff item, as outlined in Schedule 4 to the Customs Tariff Act 1995 (section 269P(3)). This instrument, TCO No. 1052946, made on 28 February 2011, declares that certain household bins are subject to a 0% duty rate, rather than the general rate of 5%.
The Customs Act 1901 imposes several obligations on parties involved with TCOs. The CEO of Customs must ensure that any application for a TCO is not in respect of goods specified in section 269SJ, which lists goods that cannot be subject to a TCO (section 269F). The CEO must also satisfy themselves that the application meets the core criteria, specifically that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). Additionally, the CEO must publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be made, and consider any submissions received (subsection 269K(1)). In this case, no submissions were received in response to the notice published for TCO No. 1052946.
The Act also outlines the consequences for breaches of its provisions. While the Explanatory Statement does not explicitly detail offences, penalties, or civil/criminal consequences, it can be inferred that failure to comply with the requirements for TCOs could lead to legal action under the Customs Act 1901. This might include enforcement actions by the CEO or other authorised officers, which could result in financial penalties, confiscation of goods, or other sanctions as prescribed by law. However, specific penalties are not detailed in the provided text, and further examination of the Customs Act 1901 and associated regulations would be necessary to fully understand the potential consequences of non-compliance.