EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1128467
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.
Power Plants Australia applied for a TCO in respect of certain leaf collection vacuum cleaners on 18 August 2011.
Instrument
TCO No 1128467 was made on 07 November 2011. It declares that those certain leaf collection vacuum cleaners 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. 1128467 is taken to have come into force on 18 August 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, provides a framework for the administration of customs duties and the regulation of imports and exports. Part XVA of this Act allows for the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs, which can result in a lower rate of customs duty for specified goods. This legislative provision was introduced to address the need for flexibility in customs duty rates to support Australian businesses by making certain imported goods more affordable and competitive. Tariff Concession Instrument No. 1128467, issued in 2011, is an example of this mechanism in action, where leaf collection vacuum cleaners were granted a tariff concession, effectively reducing their duty rate to zero. The policy objective behind this measure is to support Australian businesses by ensuring that imported goods do not face unnecessary tariff barriers, thus promoting economic efficiency and consumer choice.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the process by which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (CEO). This legislation allows for the application of lower rates of customs duty on goods that are the subject of a TCO, provided certain criteria are met. An application for a TCO can be made by any person, but it must not be in respect of goods specified in section 269SJ of the Act, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application is valid and meets the core criteria outlined in section 269C, which requires that no substitutable goods were produced in Australia in the ordinary course of business, the CEO is required to make a written order that specifies the goods to which the concession applies. The instrument outlines the process and criteria for such concessions, detailing that the CEO must publish a notice in the Gazette inviting submissions from interested parties, although in this instance, no submissions were received. The TCO is effective from the date the application was lodged, providing immediate benefits to importers by allowing them to apply for refunds of duty on goods imported since that date without imposing any new liabilities.
Key Provisions
The main operative sections of this legislation pertain to Tariff Concession Orders (TCOs) under the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a TCO for certain goods. The CEO must decide whether the application meets the core criteria specified in section 269C, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If these criteria are satisfied, the CEO is obligated under section 269P(3) to make a written order declaring that the goods the subject of the TCO application are to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. For the specific case of TCO No. 1128467, it declares that certain leaf collection vacuum cleaners are subject to the TCO, thereby applying the free rate of duty instead of the general rate of 5%.
The Act imposes certain obligations on both the CEO and applicants for a TCO. The CEO must ensure that the application meets the core criteria set out in section 269C and must make a written order if these criteria are satisfied. The applicant, in this case Power Plants Australia, must provide sufficient information to satisfy the CEO that the application meets the criteria. Additionally, as per subsection 269K(1), the CEO is required to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made. In this instance, no submissions were received.
The legislation also outlines potential consequences for non-compliance with the Act's provisions. While specific offences, penalties, or consequences are not detailed in this excerpt, the Act generally provides for both civil and criminal penalties for breaches. These may include fines or imprisonment, depending on the severity and nature of the breach. For TCO applications, failure to comply with the requirements could result in the TCO being overturned or not being granted in the first place. Furthermore, any duties improperly claimed or not paid due to a TCO could lead to additional financial penalties or the need for duty refunds as per paragraph 126(1)(r) of the Regulations.