EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1101466
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 Pty Ltd applied for a TCO in respect of certain biscuit joiner sets on 12 January 2011.
Instrument
TCO No 1101466 was made on 11 April 2011. It declares that those certain biscuit joiner sets 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. 1101466 is taken to have come into force on 12 January 2011.
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 was enacted to provide a comprehensive framework for the regulation of customs and excise in Australia, including the imposition and collection of duties and taxes. One of the mechanisms provided for in the Act is the ability to grant tariff concession orders (TCOs) to reduce the customs duty on certain imported goods under specific circumstances. The Customs Act 1901 was amended to include these provisions in response to the need for a flexible mechanism to support Australian industry and commerce by reducing the cost of imported goods that have no Australian-made equivalents. The Tariff Concession Instrument No. 1101466 was made by the Chief Executive Officer of Customs under the authority of the Customs Act 1901. The policy objective of this particular TCO, as stated in the explanatory statement, is to provide a tariff concession for certain biscuit joiner sets, reducing the customs duty from the general rate of 5% to free, thereby supporting the availability and affordability of these goods for Australian consumers and businesses.
Scope and Application
The Tariff Concession Instrument No. 1101466 under the Customs Act 1901 applies to the goods that are the subject of a Tariff Concession Order (TCO), specifically certain biscuit joiner sets in this instance. This Act facilitates applications for tariff concessions by individuals or entities seeking a lower rate of customs duty for specific goods. The application process is overseen by the Chief Executive Officer of Customs, who assesses whether the goods meet the core criteria outlined in the Act, particularly focusing on whether substitutable goods are produced in Australia. The Act’s jurisdictional reach is federal, applying across Australia as a Commonwealth legislation. Notably, this TCO does not disadvantage any person other than the Commonwealth and does not impose liabilities on any person. The geographic application of the Act is national, extending across all states and territories within Australia. Any exclusions or exemptions are specified within the Act itself, and there are no additional exclusions or thresholds mentioned for this particular TCO. The instrument also extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the applicable duty rates.
Key Provisions
The Tariff Concession Instrument No. 1101466, under the Customs Act 1901, pertains to the application of tariff concessions on specific goods. The primary operative sections involved in this legislation include sections 269F, 269C, 269B, 269D, 269E, 269P, and 269K. Section 269F allows for the application of a Tariff Concession Order (TCO) by any person to the Chief Executive Officer (CEO) of Customs. The CEO must then determine if the application meets the core criteria outlined in sections 269C and 269B, which require that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). If these criteria are met, the CEO is mandated to issue a written TCO (section 269P(3)). In this instance, TCO No. 1101466 was issued for certain biscuit joiner sets, applying item 50 of Schedule 4 to the Tariff, effectively reducing the duty from the general rate of 5% to free.
This legislation imposes several obligations and requirements on the parties involved. The CEO of Customs is tasked with evaluating TCO applications to ensure they meet the specified criteria and must publish notices in the Gazette inviting public submissions if necessary (section 269K(1)). Lincoln Sentry Pty Ltd, the applicant in this case, must ensure that their application is valid and meets all the criteria set forth by the Act. Additionally, importers of the affected goods can apply for a refund of any duties paid since the TCO's effective date, as stipulated in the Regulations (paragraph 126(1)(r)).
The Customs Act 1901 also outlines the potential consequences for non-compliance with its provisions. While the Explanatory Statement does not specify civil or criminal penalties for failing to comply with the TCO requirements, general provisions within the Act and related regulations may impose penalties for non-compliance. These could include fines or other legal repercussions, depending on the nature and severity of the breach. Given the specific focus of TCO No. 1101466 on tariff concessions, the primary consequence of non-compliance would likely revolve around the improper application or misuse of the tariff benefits granted by the TCO.
It is also important to note that the TCO does not affect the rights of any person other than the Commonwealth as of the registration date, nor does it impose any liabilities on any person for actions taken before the TCO's effective date. This means that any rights or liabilities arising from actions before 12 January 2011, the date the TCO is deemed to have come into force, remain unaffected. The rights of importers, however, are beneficially impacted, as they can seek refunds for duties paid on imports of the specified goods since the TCO's effective date.