EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0505088
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.
Victus International Pty Ltd applied for a TCO in respect of certain Dosers on 3 May 2005.
Instrument
TCO No 0505088 was made on 16 September 2005. It declares that those certain Dosers 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 0%.
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. 0505088 is taken to have come into force on 3 May 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. 0505088, enacted in 2005, was introduced to address the specific needs of businesses seeking tariff reductions on imported goods not produced in Australia. This legislative instrument operates under the Customs Act 1901, which provides a framework for Tariff Concession Orders (TCOs) that can be applied for by any person. The objective is to lower the customs duty on certain goods when no suitable domestic alternatives are available, thereby fostering fair competition and potentially lowering costs for businesses and consumers. The Tariff Concession Order No. 0505088 specifically relates to Dosers, where the general rate of duty was reduced from 5% to 0% upon the application's acceptance on 3 May 2005. The instrument was published in the Gazette, inviting public submissions, none of which were received. The TCO is effective from the date the application was lodged and does not disadvantage any person or impose new liabilities.
Scope and Application
The Customs Act 1901, specifically under Part XVA, facilitates the implementation of Tariff Concession Orders (TCOs) through the authority of the Chief Executive Officer of Customs. The Act applies to any person or entity seeking to import goods that could benefit from a lower customs duty rate if certain criteria are met. These criteria include the condition that no substitutable goods are produced in Australia in the ordinary course of business at the time the application for a TCO is lodged. The Act applies across the Commonwealth of Australia, thereby encompassing all states, territories, and national jurisdictions. The Act does not apply to goods specified in section 269SJ, which are ineligible for tariff concessions. The scope of the Act can be extended or restricted through subordinate instruments, as the CEO may make a written order specifying the prescribed item of Schedule 4 to the Customs Tariff Act 1995 applicable to the goods in question. The Explanatory Statement regarding TCO No. 0505088, for instance, pertains to certain Dosers that benefit from a reduced duty rate of 0% as of 3 May 2005, the date the application was lodged. This TCO came into force on that date, without retroactive effects on existing rights or liabilities, and allows importers to apply for duty refunds on eligible goods imported since the effective date.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0505088, as outlined in the Customs Act 1901 (the Act), are sections 269C, 269F, 269P, and 269SJ. Section 269F (3) allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) for certain goods. If the CEO is satisfied that the application meets the core criteria specified in section 269C, the CEO must make a written order declaring that the goods are subject to a TCO (section 269P(3)). This declaration means that a lower rate of customs duty applies to these goods. The Act specifies in section 269SJ the types of goods that cannot be subject to a TCO.
Under the Act, the CEO has a responsibility to assess whether a TCO application meets the core criteria. This involves determining whether, on the day the application was lodged, no substitutable goods were produced in Australia in the ordinary course of business. Substitutable goods are defined as goods produced in Australia that are put, or are capable of being put, to a use that corresponds with the goods for which the TCO is being applied. If the CEO is satisfied that the application meets these criteria, they must make a written TCO. The CEO is also required to publish a notice in the Gazette inviting any person who considers that there are reasons why the TCO should not be made to lodge a submission. In this case, no submissions were received.
Failure to comply with the requirements set out in the Act can lead to significant consequences. While the Act does not specify offences for non-compliance with the TCO process itself, it does outline penalties for broader breaches of the Customs Act. These can include fines and imprisonment, with the exact penalties depending on the nature and severity of the breach. For example, section 279 of the Act imposes penalties for contraventions of the Customs Act, including fines of up to $22,200 for individuals and $111,000 for corporations, as well as potential imprisonment terms.
The Tariff Concession Instrument No. 0505088 specifies that the TCO applies to certain Dosers, reducing the duty rate from the general 5% to 0%. The TCO is effective from 3 May 2005, the date the application was lodged. Importantly, the TCO does not affect the rights of any person other than the Commonwealth, nor does it impose any liabilities on anyone in respect of anything done or omitted before the TCO was registered. Importers of the affected goods can apply for a refund of duty on goods imported since the TCO came into force.