EXPLANATORY STATEMENT
Tariff Concession Instrument No.0502564
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.
Sunbeam Corporation Limited applied for a TCO in respect of certain frypans/skillets on 23 February 2005.
Instrument
TCO No 0502564 was made on 6 May 2005. It declares that those certain frypans/skillets are goods to which item 50A 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. 0502564 is taken to have come into force on 23 February 2005.
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, establishes a framework for the administration of customs duties and the importation of goods. One significant component of this legislative structure is the Tariff Concession Orders (TCO) scheme, introduced to address the gap in tariff relief for specific goods not produced domestically. The scheme, under Part XVA of the Act, allows the Chief Executive Officer of Customs to reduce or eliminate customs duties on certain goods, provided they meet the criteria outlined in section 269C. This initiative aims to support industries by reducing the cost of imported goods, thereby making them more competitive against locally produced alternatives. Instrument No. 0502564, made under this scheme, provides a tariff concession for certain frypans/skillets, recognising that no substitutable goods are produced in Australia and thus allowing for a duty-free importation. The instrument effectively came into force on the date the application was lodged, ensuring timely benefits to importers who can now apply for duty refunds on previously imported goods.
Scope and Application
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCO) that provide reduced customs duty rates on specified goods, contingent on the Chief Executive Officer (CEO) of Customs determining that no substitutable goods are produced in Australia in the ordinary course of business. This process applies to any person or entity that seeks to import goods eligible for a concession and is subject to the geographic reach of the Commonwealth. The legislation mandates that the CEO must consider applications that meet the core criteria outlined in section 269C of the Act, ensuring that the application pertains to goods not specified in section 269SJ, which lists goods ineligible for TCO. Once an application is accepted, the CEO must publish a notice in the Gazette inviting objections, although in the case of TCO No. 0502564, no objections were received. The TCO itself is effective from the date the application is lodged, as per subsection 269S(1) of the Act, and it does not affect any pre-existing rights or impose new liabilities on persons other than the Commonwealth.
Key Provisions
The Customs Act 1901, particularly under Part XVA, outlines the process and criteria for Tariff Concession Orders (TCOs), as detailed in section 269F. This section allows an individual or entity to apply to the Chief Executive Officer (CEO) of Customs for a TCO, which, if granted, results in a lower rate of customs duty on the specified goods. The CEO must ensure that the goods in question are not listed in section 269SJ, which details goods that cannot be subject to a TCO. To meet the core criteria for a TCO, as specified in section 269C, it must be confirmed that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. This definition is expanded upon in sections 269B, 269D, and 269E, which define 'goods produced in Australia', 'ordinary course of business', and'substitutable goods', respectively.
Under the Customs Act 1901, the CEO is mandated to impose specific obligations on applicants for a TCO. These obligations include ensuring that the application pertains to goods not listed in section 269SJ and that the application meets the core criteria set out in section 269C. The CEO must also publish a notice in the Gazette inviting submissions from any person who believes the TCO should not be granted, as per subsection 269K(1). Once the CEO is satisfied that the application meets all criteria, they are required to make a written order, declaring that the goods are subject to a prescribed rate of duty as specified in Schedule 4 to the Customs Tariff Act 1995. Furthermore, the CEO must ensure that the TCO does not disadvantage any person, other than the Commonwealth, who had rights as at the date of registration, nor impose any liabilities on such persons in respect of actions taken before the registration date.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs can lead to various civil and criminal consequences. For instance, any person found to have submitted false information in an application for a TCO may face penalties as prescribed under the relevant sections of the Act. The maximum penalties for such offences can be significant, depending on the nature and severity of the breach. Additionally, any person who knowingly or negligently contravenes the provisions of the Act may be subject to fines or imprisonment as determined by the courts. The specific penalties are detailed in the relevant sections of the Customs Act 1901 and associated regulations, which provide a framework for enforcing compliance and protecting the integrity of the customs duty system.