EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0410179
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.
Caroma Industries Pty Ltd applied for a TCO in respect of certain sanitary ware for pressure casting plant on 27 September 2004.
Instrument
TCO No 0410179 was made on 4 January 2005. It declares that those certain sanitary ware for pressure casting plant 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 3%.
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.0410179 is taken to have come into force on 27 September 2004.
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 Tariff Concession Instrument No. 0410179, enacted in 2005 under the Customs Act 1901, was introduced to address the specific needs of Caroma Industries Pty Ltd, which sought tariff concessions for certain sanitary ware used in pressure casting plant. This instrument was established to provide a lower rate of customs duty on these goods, thereby addressing a gap in the application of duty for imported items that are not produced domestically and have no substitutable alternatives within Australia. The instrument was formulated by the Chief Executive Officer of Customs, who evaluated the application against the core criteria set out in the Act, including the absence of substitutable goods produced in Australia. The instrument's enactment by the Parliament of Australia aims to support Australian businesses by making imported goods more competitively priced, thus encouraging trade and economic activity.
Scope and Application
The Customs Act 1901, specifically under Part XVA, establishes a framework through which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) that provide for a lower rate of customs duty on specified goods. This legislative provision applies to individuals or entities that seek to import goods eligible for tariff concessions, provided the goods are not explicitly excluded under section 269SJ of the Act and meet the core criteria outlined in sections 269C, 269B, and 269D. The application process requires that no substitutable goods are produced in Australia at the time of application, which is a key determinant for the concession eligibility. The geographic reach of the Act is national, impacting all importers within Australia. The Act allows for the extension or restriction of its application through subordinate instruments, although in the specific case of TCO No. 0410179, no exclusions or exemptions were identified during the application process. The TCO applies from the date the application was lodged, ensuring that importers can benefit from the lower duty rates prospectively without retroactive disadvantage.
Key Provisions
The primary sections of this Tariff Concession Instrument No. 0410179 include section 269C (core criteria for Tariff Concession Orders), section 269P (process for making a Tariff Concession Order), and section 269S (commencement of the order). Section 269C stipulates that a Tariff Concession Order (TCO) application meets the core criteria if, on the date of application, no substitutable goods were produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the Chief Executive Officer (CEO) of Customs is satisfied that the application meets these criteria, they must issue a written order declaring the goods subject to a reduced customs duty rate. Section 269S(1) states that the TCO is considered to have come into force on the date the application was lodged, thereby protecting the rights of parties involved from any disadvantage or liabilities incurred prior to the registration date.
The obligations imposed by this Act on the parties it governs include ensuring that applications for Tariff Concession Orders meet the core criteria as specified in section 269C. Specifically, applicants must demonstrate that no substitutable goods were produced in Australia in the ordinary course of business at the time of application. Additionally, the CEO is obligated to publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as per section 269K(1). Upon receiving no submissions, the CEO proceeds to make the TCO, formalising the reduced duty rate for the specified goods.
In terms of penalties and consequences, the Act does not explicitly detail criminal or civil penalties for breaches related to Tariff Concession Orders. However, non-compliance with the conditions or misrepresentation of facts in the application could lead to the denial of the TCO, thereby negating the benefit of the reduced duty rate. Additionally, if any party, including the CEO, fails to adhere to the stipulated processes, it may result in legal challenges or disputes over the validity and enforcement of the TCO.