EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1132399
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.
Globe Fire Sprinkler Australia applied for a TCO in respect of certain fire sprinkler heads on 22 September 2011.
Instrument
TCO No 1132399 was made on 21 December 2011. It declares that those certain fire sprinkler heads 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. 1132399 is taken to have come into force on 22 September 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, provides for the application of customs duties on imported goods. Part XVA of the Act establishes a scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This scheme was introduced to provide relief from customs duty for certain imported goods where no substitutable goods are produced in Australia. The Tariff Concession Instrument No. 1132399, made on 21 December 2011, is an example of this scheme in action, where certain fire sprinkler heads were granted a tariff concession, reducing the duty from 5% to free. The instrument was made after it was determined that no substitutable goods were produced in Australia and followed consultation requirements set out in the Act, although no objections were received. The TCO came into force on 22 September 2011, the date the application was lodged, and does not affect the rights of persons other than the Commonwealth in respect of actions taken before the date of registration. Importers of the affected goods can apply for a refund of duties paid since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 1132399, made under the Customs Act 1901, applies specifically to certain fire sprinkler heads as requested by Globe Fire Sprinkler Australia. This legislation pertains to the imposition of customs duties on these goods, which are subject to a tariff concession order (TCO) that was declared on 21 December 2011 by the Chief Executive Officer of Customs. The TCO applies to goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995, reducing the general duty rate from 5% to free. This concession is contingent on the CEO’s determination that no substitutable goods were produced in Australia at the time of the application. The TCO operates nationally across Australia, and its scope is limited to the goods specifically mentioned in the instrument. There are no exclusions or exemptions stipulated for this particular TCO, and it does not affect any pre-existing rights or liabilities incurred before its effective date of 22 September 2011.
Key Provisions
The primary operative sections of the Tariff Concession Order (TCO) No. 1132399 are sections 269C, 269F, 269P(3), and 269SJ of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. Section 269C outlines the core criteria for a TCO application to be considered valid, which requires that no substitutable goods were produced in Australia on the day the application was lodged. If the CEO is satisfied that the application meets these criteria, a written TCO is issued, as mandated by section 269P(3), specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 that applies to the goods. Section 269SJ, meanwhile, specifies the goods that cannot be the subject of a TCO.
The obligations and requirements imposed by the Act on parties or entities governed by this legislation are primarily focused on the application process for a TCO. The CEO must ensure that a TCO application is not in respect of goods specified in section 269SJ, and that it meets the core criteria outlined in section 269C. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting a TCO application, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this instance, no submissions were received in response to the published notice.
In terms of potential offences, penalties, or civil/criminal consequences for breach, the explanatory statement does not explicitly mention any specific penalties or consequences for non-compliance with the TCO. However, the Customs Act 1901 does provide for various offences and penalties related to customs duties and the importation of goods, which may apply in the context of breaches of the TCO. For instance, section 213 of the Customs Act 1901 outlines penalties for offences such as the fraudulent importation of goods, which could include substantial fines or imprisonment. It is essential for parties involved in the importation of goods subject to a TCO to ensure compliance with all applicable provisions to avoid any potential legal repercussions.