EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1134344
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.
Cormack Packaging Pty Ltd applied for a TCO in respect of certain trigger pump sprayers on 12 October 2011.
Instrument
TCO No 1134344 was made on 04 January 2012. It declares that those certain trigger pump sprayers 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. 1134344 is taken to have come into force on 12 October 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 through which the Chief Executive Officer of Customs may issue Tariff Concession Orders (TCOs). These orders provide a lower rate of customs duty on specified goods, subject to certain conditions. The primary problem this legislation addresses is the potential for local industries to be unfairly disadvantaged if imported goods are produced domestically but at a higher cost or with less efficiency. This Act was introduced to balance trade by allowing the importation of goods at reduced duty rates, provided that no substitutable goods are being produced domestically in the ordinary course of business. The policy objective is to foster fair competition while protecting local industries where necessary. Tariff Concession Instrument No. 1134344, made under this Act, provides a tariff concession for certain trigger pump sprayers, allowing them to enter the Australian market at no duty, thereby addressing the specific issue of local production versus import efficiency for these particular goods.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the application and creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This legislation applies to any person or entity seeking a lower rate of customs duty for specific goods, provided that these goods are not among those specified in section 269SJ of the Act as ineligible for TCOs. The Act is applicable on a national level across Australia, with the concessions being effective as of the date an application is lodged. It is worth noting that the TCO does not retroactively disadvantage any person or impose liabilities for actions taken prior to the registration date of the concession. The scope of the Act is further extended through subordinate instruments, which can specify detailed criteria and conditions under which TCOs may be granted. Exemptions and exclusions are clearly defined within the Act, ensuring that only eligible goods benefit from reduced customs duties.
Key Provisions
The Customs Act 1901 (the Act) enables the Chief Executive Officer of Customs (the CEO) to make Tariff Concession Orders (TCOs) through which a lower rate of customs duty is applied to specified goods (section 269F). A TCO application is considered valid if it meets the core criteria, which include the condition that no substitutable goods were produced in Australia on the day the application was lodged (section 269C). The definitions of key terms such as 'substitutable goods' and 'ordinary course of business' are provided in sections 269B, 269D and 269E of the Act. If the CEO is satisfied that the application meets these criteria, they must issue a written order declaring the goods to which a specified item of Schedule 4 to the Customs Tariff Act 1995 applies (subsection 269P(3)).
The obligations imposed by the Act on the parties involved include the requirement for applicants to submit a valid TCO application that meets the core criteria. The CEO must assess the application and, if satisfied, make a written order. Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who may have reasons why the TCO should not be made (subsection 269K(1)). In the case of TCO No. 1134344, Cormack Packaging Pty Ltd applied for a TCO for certain trigger pump sprayers, and the CEO made the order as no substitutable goods were produced in Australia. The TCO came into force on the date the application was lodged, 12 October 2011.
Failure to comply with the requirements of the Act or the terms of a TCO may result in legal consequences. While the specific offences and penalties are not detailed in the provided text, generally under the Customs Act, breaches can lead to civil or criminal penalties. For instance, the general rate of duty on the trigger pump sprayers in question is 5%, but the TCO specifies a rate of duty of free. Importers can apply for a refund of duty on goods imported since the TCO came into force under paragraph 126(1)(r) of the Regulations. Non-compliance with these provisions could potentially lead to legal action, fines, or other penalties as stipulated by the Act.
The explanatory statement indicates that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose liabilities for actions taken before the registration date (subsection 269S(1)). The rights of importers will be beneficially affected, as they can apply for a refund of duty on goods imported since the TCO came into force. This provision ensures that the TCO does not retroactively impose any new liabilities or disadvantages on any party.