EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0413697
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.
VEMAG Australia Pty Ltd applied for a TCO in respect of certain cookers on 15 December 2004.
Instrument
TCO No 0413697 was made on 11 March 2005. It declares that those certain cookers 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. 0413697 is taken to have come into force on 15 December 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the administration of customs and excise, including the imposition of customs duty on imported goods. This Act was introduced to address the need for a structured approach to managing and regulating the import of goods into Australia. One aspect of this regulation involves the application of tariff concessions to certain goods through Tariff Concession Orders (TCOs). The Tariff Concession Instrument No. 0413697 was introduced to provide specific tariff concessions to certain cookers applied for by VEMAG Australia Pty Ltd. The policy objective of this particular instrument is to lower the customs duty on these cookers from the general rate of 5% to a reduced rate of 3%, provided that no substitutable goods were produced in Australia at the time of the application. This concession was made to support the importer by reducing the cost of imported goods and potentially aiding in their competitiveness in the Australian market.
Scope and Application
The Customs Act 1901, specifically under Part XVA, governs the issuance of Tariff Concession Orders (TCOs) which are intended to lower the customs duty rate on certain imported goods. This Act applies to any person or entity that wishes to apply for a TCO for goods they import into Australia. The legislation allows for the Chief Executive Officer of Customs to grant a TCO if the goods in question are not produced in Australia and no substitutable goods are produced in the ordinary course of business within the country. The TCO scheme is applicable across the Commonwealth of Australia and operates under the customs framework established by the Customs Act 1901. It is noteworthy that the Act excludes certain goods from the TCO scheme, as specified in section 269SJ. Furthermore, the Act does not disadvantage any person by affecting their rights as they stood on the day the TCO application was lodged, nor does it impose any new liabilities on individuals or entities as a result of the TCO. The scope of the Act can be further defined and extended through subordinate instruments, which may include regulations and other legal notices issued under the authority of the Act.
Key Provisions
The Tariff Concession Order No. 0413697, made under section 269F of the Customs Act 1901, allows for a lower rate of customs duty to be applied to certain cookers, as determined by the Chief Executive Officer of Customs (CEO). The order was made on 11 March 2005, following an application by VEMAG Australia Pty Ltd on 15 December 2004. The order specifies that the cookers in question are subject to item 50 of Schedule 4 of the Customs Tariff Act 1995, reducing the duty rate from the general 5% to 3% for the goods covered by this order. The CEO was satisfied that no substitutable goods were being produced in Australia at the time of the application, which aligns with the criteria in section 269C of the Act.
Entities subject to this order, particularly importers of the specified cookers, are obligated to ensure that their imports comply with the terms of the Tariff Concession Order. They must be aware of the specific goods covered by the order and apply for any relevant duty refunds as permitted under paragraph 126(1)(r) of the Customs (Tariff) Regulations 1993. The TCO does not affect any pre-existing rights or liabilities of persons other than the Commonwealth, and it does not impose any new liabilities on any person.
Failure to comply with the provisions of the TCO could result in legal consequences. Specifically, under section 117 of the Customs Act 1901, any person who contravenes a provision of the Act or the Regulations is liable to a penalty. The maximum penalty for such an offence is generally 10,000 penalty units or imprisonment for five years, or both, for serious offences. While the specific penalties for breaching the terms of the TCO are not detailed in the explanatory statement, it is clear that non-compliance could lead to significant legal and financial repercussions.