EXPLANATORY STATEMENT
Tariff Concession Instrument No.0503524
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.
Pearl International Pty Ltd applied for a TCO in respect of certain whipped cream syphon dispensers on 23 March 2005.
Instrument
TCO No 0503524 was made on 10 June 2005. It declares that those certain whipped cream syphon dispensers 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. 0503524 is taken to have come into force on 23 March 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 Tariff Concession Instrument No. 0503524 was enacted in 2005 to address the need for tariff concessions on specific goods not produced in Australia, thereby providing relief to importers and encouraging trade. This instrument was made under the Customs Act 1901, administered by the Chief Executive Officer of Customs. The policy objective of this legislation is to ensure that Australian consumers and businesses have access to goods that are not domestically produced, thus promoting competition and choice in the market. This is achieved by allowing the CEO to make Tariff Concession Orders (TCOs) for goods that meet certain criteria, thereby reducing the customs duty on those goods. Pearl International Pty Ltd successfully applied for a TCO for certain whipped cream syphon dispensers, which are now subject to a zero rate of duty rather than the general 5% rate, effective from the date the application was lodged.
Scope and Application
The Tariff Concession Instrument No. 0503524 applies to goods specified in the instrument, namely certain whipped cream syphon dispensers, which are subject to a Tariff Concession Order (TCO) under the Customs Act 1901. This legislation facilitates tariff concessions for goods not produced in Australia, thereby reducing customs duties on these specific imported goods. The Act applies to entities or individuals involved in the importation of these goods, thereby impacting the import duties applicable to them. The scope of the Act extends across the Commonwealth of Australia, ensuring a consistent application of tariff concessions nationwide. However, the Act excludes certain goods from tariff concessions as specified in section 269SJ of the Customs Act 1901. The application and effect of the TCO are further defined and potentially extended through subordinate instruments, such as the Customs Tariff Act 1995, which provides the specific duty rates and classifications.
Key Provisions
The primary sections of the Tariff Concession Instrument No. 0503524 (TCO No. 0503524) under the Customs Act 1901 (section 269P(3)) declare that certain whipped cream syphon dispensers are subject to a tariff concession order. This means that these specific goods will now be subject to a reduced customs duty rate of free, as opposed to the general rate of 5% (section 269P(3)). The TCO was made on 10 June 2005 following an application by Pearl International Pty Ltd on 23 March 2005. The TCO became effective on the date the application was lodged, which is 23 March 2005, according to subsection 269S(1) of the Act.
The obligations imposed by the Act on the parties involved, particularly the Chief Executive Officer of Customs (CEO), include ensuring that any TCO application that is not in respect of goods specified in section 269SJ of the Act is evaluated against the core criteria set out in section 269C. The CEO must also ensure that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged. If these criteria are met, the CEO must then make a written order declaring the goods to which a prescribed item of Schedule 4 to the Customs Tariff Act 1995 applies. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made, as stipulated in subsection 269K(1) of the Act.
In terms of potential offences and penalties for breach, the Act does not specify any particular offences or penalties in relation to the making of a TCO. However, any misuse or fraudulent behaviour related to the importation of goods under this concession could potentially lead to penalties under other sections of the Customs Act 1901 or related legislation. For example, if an importer were to falsely claim a tariff concession for goods not eligible under the TCO, they could be subject to penalties for making false statements or engaging in fraudulent activities, which may include fines or imprisonment depending on the severity of the offence.
The Tariff Concession Instrument No. 0503524 ensures that importers of the specified whipped cream syphon dispensers can benefit from a zero customs duty rate, which should result in cost savings and potentially lower prices for consumers. This TCO does not impose any new liabilities on persons other than the Commonwealth and does not affect existing rights as at the date of registration. The implementation of the TCO aims to support Australian businesses by providing them with competitive tariff rates for imported goods that do not have local substitutes.