EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1110049
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.
Northcote Pottery applied for a TCO in respect of certain planter pot saucers on 17 March 2011.
Instrument
TCO No 1110049 was made on 06 June 2011. It declares that those certain planter pot saucers 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. 1110049 is taken to have come into force on 17 March 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 regulate and administer customs and excise duties, and it includes provisions for Tariff Concession Orders (TCOs) under Part XVA. This piece of legislation was introduced to address the need for reducing customs duties on specific goods to encourage trade and economic benefits, provided certain conditions are met, such as the absence of substitutable goods produced in Australia. The instrument in question, Tariff Concession Instrument No. 1110049, was enacted by the Chief Executive Officer of Customs following an application by Northcote Pottery for a TCO concerning certain planter pot saucers. The CEO determined that no substitutable goods were produced in Australia, thus satisfying the core criteria set forth in the Act. The policy objective is to facilitate trade by providing duty-free concessions on specified goods, thereby benefiting importers who can claim refunds for duties paid on such goods since the effective date of the TCO.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 1110049, applies to individuals or entities seeking tariff concessions on imported goods, particularly those who have applied for a Tariff Concession Order (TCO) from the Chief Executive Officer of Customs. This legislation is pertinent to industries and entities involved in the importation of goods that may qualify for reduced customs duties under the specified conditions. The Act governs the process through which TCOs are applied for and granted, ensuring that the concessions are applicable to goods for which no substitutable products are produced in Australia in the ordinary course of business. Geographically, the Act operates under the Commonwealth jurisdiction, extending its application across Australia. However, it excludes certain goods as specified in section 269SJ of the Act, which cannot be subject to a TCO. The application of this Act can be further refined or extended through subordinate instruments, though the primary scope is dictated by the core criteria and conditions outlined in the Customs Act 1901.
Key Provisions
The key operative sections of this legislation, as outlined in the explanatory statement, involve the making of Tariff Concession Orders (TCOs) under section 269F of the Customs Act 1901 (the Act). Section 269F permits an individual or entity to apply to the Chief Executive Officer of Customs (the CEO) for a TCO in respect of specific goods. The CEO must then assess the application to determine whether it meets the core criteria as outlined in section 269C. If the application satisfies these criteria, a TCO will be issued, granting a lower rate of customs duty on the specified goods.
The obligations and requirements imposed by this Act on the parties it governs are primarily centred on the process of applying for and receiving a TCO. When an application is lodged, the CEO must publish a notice in the Gazette, inviting any interested parties to submit their views on whether the TCO should proceed. The CEO must consider these submissions before making a decision. In this case, no submissions were received, which facilitated the swift approval of the TCO. Once the TCO is in effect, the rights of importers are positively impacted, and they may apply for a refund of duty on the relevant goods under paragraph 126(1)(r) of the Regulations.
The legislation does not explicitly state any offences, penalties, or civil or criminal consequences for breach. However, the process for obtaining a TCO and the conditions under which one can be granted are clearly defined. If an entity were to apply for a TCO in a manner that does not meet the statutory criteria, the CEO would not be obliged to approve the application, and thus the applicant would not receive the tariff concession. Additionally, if an entity were to claim a refund of duty under the TCO without meeting the eligibility criteria, their claim could be rejected by the relevant authorities. The Act does not specify maximum penalties for breaches, but any fraudulent activities related to tariff concessions could potentially lead to criminal charges under other relevant legislation.