EXPLANATORY STATEMENT
Tariff Concession Instrument No. 1136380
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.
Hamlon Pty Ltd applied for a TCO in respect of certain retail sale goods holding racks and hooks on 31 October 2011.
Instrument
TCO No 1136380 was made on 23 January 2012. It declares that those certain retail sale goods holding racks and hooks 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. 1136380 is taken to have come into force on 31 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 Australian Parliament, provides a framework for the administration of customs duties and includes provisions for Tariff Concession Orders (TCOs). These orders allow for reduced customs duty rates on specific goods under certain conditions, primarily to support industries where no local production exists. The explanatory statement for Tariff Concession Instrument No. 1136380, issued on 23 January 2012, details an instance where Hamlon Pty Ltd successfully applied for a TCO concerning certain retail sale goods holding racks and hooks. The instrument declares that these goods are subject to a duty rate of zero, down from the general rate of 5%, after it was determined that no substitutable goods were produced in Australia. The CEO of Customs was satisfied with the application and did not receive any objections from the public, leading to the issuance of this concession. This TCO aims to facilitate trade by reducing costs for importers without disadvantaging existing rights or imposing new liabilities on any parties.
Scope and Application
The Tariff Concession Instrument No. 1136380 under the Customs Act 1901 applies specifically to certain retail sale goods holding racks and hooks. The legislation allows for the application of a lower rate of customs duty on these goods, contingent upon satisfying the core criteria set out in the Act. Specifically, the Chief Executive Officer of Customs must determine that no substitutable goods were produced in Australia at the time the application was lodged. This instrument extends to the Commonwealth jurisdiction and applies to the specified goods, ensuring that no substitutable goods were produced domestically. The instrument was made on 23 January 2012, and it declares that the retail sale goods holding racks and hooks are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, resulting in a tariff rate of free, down from the general rate of 5%. The application process includes a requirement for the CEO to publish a notice in the Gazette inviting submissions from any interested parties, although no submissions were received in this instance. The tariff concession does not affect existing rights or impose liabilities on any person other than the Commonwealth.
Key Provisions
The key operative sections of this legislation, specifically Tariff Concession Order No. 1136380 under the Customs Act 1901, include sections 269C, 269B, 269D, 269E, and 269P. These sections establish the criteria for the Chief Executive Officer of Customs (CEO) to consider when deciding whether to issue a Tariff Concession Order (TCO). For instance, section 269C stipulates that a TCO application meets the core criteria if, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business (section 269E). If the CEO is satisfied that the application meets these criteria, they must issue a written TCO (section 269P(3)).
The obligations imposed by this Act on the parties or entities it governs primarily concern the application process for a TCO. Hamlon Pty Ltd, for example, applied for a TCO in respect of certain retail sale goods holding racks and hooks on 31 October 2011. The CEO was required to assess whether the application met the core criteria, including verifying that no substitutable goods were produced in Australia on the day the application was lodged. Additionally, section 269K(1) requires the CEO to publish a notice in the Gazette inviting submissions from any person who considers there are reasons why the TCO should not be made. In this case, no submissions were received.
The legislation also outlines potential consequences for breach. Although specific offences are not detailed in the text, the general rate of duty on the goods in question is 5%. For the goods subject to the TCO, the rate of duty is free, which is beneficial to importers. Under paragraph 126(1)(r) of the Regulations, importers of such goods can apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. The TCO does not impose any liabilities on any person, as stipulated in the Act. This suggests that while there may be procedural obligations to follow, the primary consequence of non-compliance would be the denial of tariff concessions and associated benefits.