EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507062
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.
Electrical Home Aids Pty Ltd applied for a TCO in respect of certain Vacuum Cleaners on 9 June 2005.
Instrument
TCO No 0507062 was made on 21 October 2005. It declares that those certain Vacuum Cleaners 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. 0507062 is taken to have come into force on 9 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. 0507062, enacted under the Customs Act 1901, addresses the need to provide tariff concessions for specific goods that are not produced in Australia, thereby ensuring competitive and fair market conditions. This instrument was introduced to facilitate the application of tariff concessions by allowing the Chief Executive Officer of Customs to reduce the rate of customs duty on imported goods that meet certain criteria. The instrument was enacted by the Parliament of Australia, aiming to support Australian businesses by reducing the cost of imported goods and promoting trade efficiency. The policy objective is to ensure that Australian consumers and businesses have access to competitively priced goods that are not produced domestically, thereby enhancing economic growth and consumer welfare.
Scope and Application
The Tariff Concession Instrument No. 0507062, made under the Customs Act 1901, applies to the import of certain Vacuum Cleaners as specified by Electrical Home Aids Pty Ltd. The Act enables the Chief Executive Officer of Customs (CEO) to grant Tariff Concession Orders (TCO) for goods, which lowers the customs duty on those goods. The TCO applies to the specific Vacuum Cleaners identified in the Instrument and operates within the jurisdiction of the Commonwealth of Australia, ensuring compliance with the Customs Act and the Customs Tariff Act 1995. The CEO is mandated to evaluate TCO applications against the criteria outlined in the Act, specifically ensuring that no substitutable goods are produced in Australia on the date the application is lodged. Once the CEO determines that the core criteria are met, a TCO is issued, as occurred in this case, reducing the duty rate from the general 5% to 0%. Notably, the TCO does not retroactively affect the rights of any person and does not impose liabilities for actions taken prior to its issuance. Importers can benefit from this concession by applying for a refund of any duties paid on the specified goods since the date the TCO came into effect.
Key Provisions
The primary operative sections of Tariff Concession Instrument No. 0507062, under the Customs Act 1901, are sections 269C, 269F, 269P, and 269SJ. Section 269F allows for an application to be made to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not specified in section 269SJ, which lists those goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria outlined in section 269C, they must make a written order declaring that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995. In this case, the TCO declares that the certain vacuum cleaners are subject to a 0% duty rate instead of the general 5% duty rate.
The Act imposes several obligations and requirements on the parties it governs. An applicant, such as Electrical Home Aids Pty Ltd, must ensure that their application for a TCO meets the criteria set out in the Act, particularly that no substitutable goods are produced in Australia. The CEO must review the application, assess if it meets the core criteria, and if so, make a TCO. Additionally, the CEO is required to publish a notice in the Gazette as soon as practicable after accepting the application, inviting any interested parties to lodge submissions if they believe the TCO should not be made. In this case, the CEO received no submissions, facilitating the creation of the TCO.
Offences and penalties for breach of the Act are not explicitly detailed in this particular Instrument. However, general provisions of the Customs Act 1901 provide that failure to comply with the Act could result in criminal or civil penalties. These may include fines or imprisonment for individuals, and fines for companies, depending on the nature and severity of the breach. The exact penalties would be determined by the courts based on the specific circumstances of any non-compliance.
In summary, Tariff Concession Instrument No. 0507062 establishes a concessional tariff rate for certain vacuum cleaners, reducing the duty from 5% to 0%. The CEO's role in reviewing and approving the TCO, along with the obligation to publish notices and consider submissions, is crucial in ensuring the process is transparent and fair. Although specific penalties for breach are not outlined in this Instrument, the overarching Customs Act 1901 provides a framework for enforcement and consequences for non-compliance.