EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1111667
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.
Frost Promotions applied for a TCO in respect of certain torches on 06 April 2011.
Instrument
TCO No 1111667 was made on 27 June 2011. It declares that those certain torches 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. 1111667 is taken to have come into force on 06 April 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 Australian Parliament, establishes a framework within which Tariff Concession Orders (TCOs) can be implemented to provide lower rates of customs duty on specified goods. This legislation addresses the need to encourage the importation of certain goods by reducing their tariff rates, thereby making them more affordable and accessible. The explanatory statement accompanying Tariff Concession Instrument No. 1111667, issued on 27 June 2011, details the process by which the Chief Executive Officer of Customs (CEO) evaluated an application from Frost Promotions for a TCO concerning specific torches. The CEO determined that no substitutable goods were produced in Australia, satisfying the core criteria outlined in the Act. Consequently, a TCO was issued, setting the duty rate for these torches at free, down from the general rate of 5%. This instrument came into force on 6 April 2011, the date the application was lodged, and does not retroactively disadvantage or impose liabilities on any person.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. These orders provide a lower rate of customs duty for certain goods when specific conditions are met. A TCO can be applied for by any person regarding goods not listed in section 269SJ of the Act, which excludes certain types of goods from eligibility. If the CEO determines that the application meets the core criteria, notably the absence of substitutable goods being produced in Australia at the time of application, a TCO is issued. This instrument applies to the specified goods, allowing them to benefit from a reduced duty rate as per the Customs Tariff Act 1995. The TCO does not affect pre-existing rights or impose liabilities on any person except the Commonwealth, and it provides an opportunity for importers to apply for refunds of duties paid on these goods since the effective date of the TCO. The scope of this legislation is limited to the goods subject to the specific TCO, and it operates within the national jurisdiction of Australia.
Key Provisions
The Customs Act 1901, specifically under Part XVA, provides the legal framework for the issuance of Tariff Concession Orders (TCOs) by the Chief Executive Officer (CEO) of Customs. Section 269F allows any individual to apply for a TCO in respect of particular goods, provided those goods are not specified in section 269SJ, which lists goods ineligible for TCOs. If the application is deemed valid and meets the core criteria set out in section 269C, the CEO must make a written TCO order, declaring that the goods in question are subject to a lower rate of duty, as specified in Schedule 4 to the Customs Tariff Act 1995.
Obligations under the Act require the CEO to carefully assess each application to ensure it meets the core criteria, particularly that no substitutable goods are being produced in Australia on the day the application is lodged. This includes interpreting terms such as 'goods produced in Australia', 'ordinary course of business', and 'substitutable goods' as defined by sections 269D, 269E, and 269F respectively. Once the CEO is satisfied that an application meets these criteria, the obligation to issue a TCO becomes mandatory.
Failure to comply with the requirements of the Customs Act 1901 or the terms of a TCO can lead to legal consequences. The Act does not explicitly state penalties for breaches but implies that non-compliance could result in civil or criminal liability under broader customs laws. For instance, incorrect declarations or fraudulent applications may attract penalties under the broader customs regulations, including fines or imprisonment, depending on the severity of the breach.
In the case of TCO No. 1111667, the CEO was satisfied that the application from Frost Promotions for certain torches met the core criteria and thus issued a TCO. This TCO took effect on the date the application was lodged, 06 April 2011, and provides a zero-rate duty on the specified torches, significantly reducing the import costs for these goods. The CEO's decision to issue this TCO was made transparent through a published notice in the Gazette, inviting submissions from the public, although none were received. The TCO does not affect any pre-existing rights or impose new liabilities on individuals, ensuring a smooth transition for those already importing or planning to import these goods.