EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507031
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.
Freudenberg Household Products Pty Ltd applied for a TCO in respect of certain Electrostatic Dusters on 8 June 2005.
Instrument
TCO No 0507031 was made on 2 September 2005. It declares that those certain Electrostatic Dusters 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. 0507031 is taken to have come into force on 8 June 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. 0507031, made under the Customs Act 1901, was enacted in 2005 to address the need for tariff concessions for specific goods imported into Australia. The Act, overseen by the Parliament of Australia, aims to facilitate trade by providing reduced customs duties for certain goods that do not have Australian-made alternatives. In this instance, the instrument was introduced to provide tariff relief for certain Electrostatic Dusters, reducing the duty rate from 5% to 0%. This measure was enacted to ensure that Australian consumers and businesses could access these goods at a lower cost, thereby promoting economic efficiency and competitiveness in the marketplace. The instrument was effective from the date the application was lodged, 8 June 2005, and did not impose any liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0507031 under the Customs Act 1901 applies to goods specified in the application made to the Chief Executive Officer of Customs (CEO). In this instance, the Act applies to certain Electrostatic Dusters as identified by Freudenberg Household Products Pty Ltd. The instrument allows for the application of a lower rate of customs duty to these goods if the CEO determines that no substitutable goods were produced in Australia in the ordinary course of business at the time of the application. The instrument’s geographic and jurisdictional reach is national, as it operates under the Commonwealth laws outlined in the Customs Act 1901. The application process involves ensuring that the goods in question do not fall under the list of excluded items specified in section 269SJ of the Act. The Act also mandates that the CEO must publish a notice in the Gazette inviting any person to submit objections to the tariff concession order, although in this case, no submissions were received. The instrument comes into force on the date the application was lodged, which for this case was 8 June 2005, and it does not retroactively affect the rights of any person or impose any liabilities on anyone for actions taken before its registration.
Key Provisions
The Customs Act 1901, through Part XVA, facilitates the creation of Tariff Concession Orders (TCOs) which lower the customs duty on specified goods (s 269F). A person can apply for a TCO for goods, provided they are not specified in section 269SJ, which lists goods ineligible for a TCO (s 269C). The Chief Executive Officer of Customs (CEO) must then decide if the application meets the core criteria, primarily that no substitutable goods are produced in Australia at the time the application is lodged (s 269P(3)). If the CEO is satisfied that the application meets the core criteria, they must issue a TCO, specifying the applicable customs duty rate from Schedule 4 of the Customs Tariff Act 1995 (s 269P(3)).
Entities or individuals seeking a TCO must ensure their application is submitted in accordance with the requirements of the Customs Act 1901. They must provide sufficient information to demonstrate that the goods for which they seek a concession do not have substitutable alternatives produced in Australia, as defined by sections 269D and 269E. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit submissions opposing the TCO within a specified period (s 269K(1)). The CEO is then required to consider any such submissions before making a final decision.
Breaching the requirements set out in the Customs Act 1901 or the associated regulations can lead to various consequences. For instance, if an entity provides false information in an application for a TCO, they may face criminal charges and penalties. The maximum penalty for providing false or misleading statements to the CEO under the Customs Act 1901 can be substantial, including fines of up to 10,000 penalty units or imprisonment for up to five years, or both, depending on the severity of the offence (s 269Q). Additionally, any entity found to be in breach of the conditions specified in a TCO may be subject to civil penalties, including fines or other enforcement actions.
The TCO No. 0507031, issued on 2 September 2005, specifies that certain electrostatic dusters are subject to a 0% customs duty rate instead of the general 5% rate. This concession became effective on 8 June 2005, the date the application was lodged (s 269S(1)). Importantly, this order does not affect any existing rights or impose new liabilities on persons other than the Commonwealth, and it allows eligible importers to apply for duty refunds on goods imported since the effective date of the TCO.