EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1103003
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.
Caroma Industries Ltd applied for a TCO in respect of certain toilet cistern buttons on 20 January 2011.
Instrument
TCO No 1103003 was made on 12 April 2011. It declares that those certain toilet cistern buttons 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. 1103003 is taken to have come into force on 20 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, enacted by the Commonwealth Parliament, establishes a framework for the administration of customs and excise duties in Australia, including provisions for Tariff Concession Orders (TCOs). The Act aims to provide relief on customs duties for certain imported goods under specific conditions. In 2011, the Act was amended to address the need for a streamlined process to grant tariff concessions, ensuring that businesses and consumers benefit from reduced duty rates on imported goods where appropriate. The Tariff Concession Instrument No. 1103003, made under the authority of the Act, exemplifies this by providing a tariff concession for certain toilet cistern buttons, thereby reducing their duty from 5% to free, as no substitutable goods were being produced in Australia at the time of the application. The process for issuing such concessions includes mandatory public consultation, which in this case resulted in no objections to the concession being granted. The concession came into effect on the date of the application, 20 January 2011, without retroactively affecting the rights of any party.
Scope and Application
The Tariff Concession Instrument No. 1103003, issued under the Customs Act 1901, applies to specific goods, in this case certain toilet cistern buttons, and is directed towards entities or individuals seeking to import these goods into Australia. The legislation is designed to reduce the customs duty rate on these goods to zero, provided no substitutable goods are produced in Australia. The application of this instrument is national, as it pertains to the Commonwealth level, and affects the importation of these specified goods across Australia. The exclusions under this Act include goods that are specified in section 269SJ of the Customs Act 1901, which cannot be subject to a Tariff Concession Order. The CEO of Customs has the authority to extend or restrict the application of this Act through subordinate instruments, ensuring flexibility in its implementation. The commencement of this Tariff Concession Order is retroactive to the date the application was lodged, 20 January 2011, and it does not impose any liabilities on persons other than the Commonwealth nor affect existing rights adversely.
Key Provisions
The Customs Act 1901, specifically Part XVA, establishes the framework for Tariff Concession Orders (TCOs), which are lower rates of customs duty applied to certain goods. When an applicant, such as Caroma Industries Ltd, applies for a TCO (section 269F), the Chief Executive Officer (CEO) of Customs must consider whether the application meets the core criteria outlined in section 269C. This involves verifying that no substitutable goods are produced in Australia on the day the application is lodged (section 269P(3)). If the CEO determines that the application meets these criteria, they must issue a written TCO, as seen in TCO No. 1103003, which applies to certain toilet cistern buttons, reducing their customs duty rate from 5% to free (section 269P(3)).
The obligations imposed by the Act on the parties involved include the requirement for the CEO to publish a notice in the Gazette, inviting submissions from any interested parties who might oppose the TCO (subsection 269K(1)). In this instance, no submissions were received. Additionally, the Act mandates that a TCO is considered effective from the date the application is lodged (subsection 269S(1)). This means that TCO No. 1103003 was effective from 20 January 2011. Importers of the affected goods can benefit from this by applying for a refund of duties paid on those goods since the effective date, as per Regulation 126(1)(r). Importantly, the Act ensures that the rights of non-Commonwealth parties are not adversely affected by the TCO, and no new liabilities are imposed on anyone.
In terms of consequences, the Act does not specify any criminal offences or penalties for breaches of TCO provisions. However, any party adversely affected by the TCO could potentially challenge it through other legal avenues available under the Customs Act or other relevant legislation. The primary civil consequence is the ability for importers to seek duty refunds, which is facilitated by the Act to ensure fairness and compliance with the TCO’s intent.