EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0507357
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.
Watersave Australia Pty Ltd applied for a TCO in respect of certain water-free porcelain urinals on 15 June 2005.
Instrument
TCO No 0507357 was made on 2 September 2005. It declares that those certain water-free porcelain urinals 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. 0507357 is taken to have come into force on 15 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework for the regulation of customs and excise duties. The Tariff Concession Instrument No. 0507357, introduced in 2005, addresses the problem of ensuring that tariff concessions are granted in a manner that promotes fair trade practices and supports Australian industries by preventing the circumvention of customs duties through the import of substitutable goods. This instrument allows the Chief Executive Officer of Customs to grant tariff concessions on specific goods if no substitutable goods are produced in Australia, thereby protecting domestic industries. The policy objective is to ensure that tariff concessions are granted only when it is clear that such concessions will not disadvantage Australian producers. This legislative measure was designed to streamline the application process for tariff concessions while maintaining the integrity of Australia’s trade and tariff policies.
Scope and Application
The Tariff Concession Instrument No. 0507357, made under the Customs Act 1901, applies to individuals or entities seeking tariff concessions for specific goods, in this case, certain water-free porcelain urinals. The application process involves a submission to the Chief Executive Officer of Customs, who evaluates whether the application meets the core criteria, primarily focusing on the absence of substitutable goods produced in Australia. The instrument specifically exempts goods listed in section 269SJ of the Act, which cannot be subject to a Tariff Concession Order. This instrument operates on a Commonwealth level and its reach is limited to the customs duties and tariff concessions within Australia, impacting primarily the import sector by potentially lowering the duty rates on specified goods. The Tariff Concession Order No. 0507357, which became effective on the date of application, provides a free rate of duty for certain water-free porcelain urinals, reducing the general rate from 5% to free, and does not impose any liabilities on persons other than the Commonwealth.
Key Provisions
The Tariff Concession Instrument No. 0507357, under the Customs Act 1901, outlines specific provisions for tariff concessions for certain goods, in this case, water-free porcelain urinals. Section 269F allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO). If the application is for goods not specified in section 269SJ, which lists goods ineligible for a TCO, the CEO must assess if the application meets the core criteria outlined in section 269C. This involves determining whether, on the application date, no substitutable goods were produced in Australia in the ordinary course of business. Definitions for these terms are provided in sections 269D, 269E, and 269F. If the CEO confirms that the application meets the criteria, they must issue a written TCO order under section 269P(3).
The obligations imposed by the Act on parties involve ensuring that any application for a TCO is made in good faith and with the requisite information. The CEO is obligated to publish a notice in the Gazette inviting submissions from any interested parties once an application is accepted as valid, as required by subsection 269K(1). This transparency measure ensures that all relevant concerns are considered before a TCO is issued. In this case, the CEO did not receive any submissions, which facilitated the prompt issuance of TCO No. 0507357. The TCO itself ensures that the rights of importers are protected and beneficially affected, allowing them to apply for a refund of duty on goods imported since the TCO came into effect, as stipulated under paragraph 126(1)(r) of the Regulations.
Failure to comply with the provisions of the Customs Act 1901 can lead to various legal consequences. Breaches of the Act or misuse of the tariff concession provisions can result in both civil and criminal penalties. Civil penalties can include fines, while criminal penalties can involve imprisonment, reflecting the seriousness of non-compliance. The maximum penalties for breaches are detailed in relevant sections of the Act and associated regulations, although the specifics are not outlined in the Explanatory Statement provided. The Act ensures that the integrity of the customs duty system is maintained, thereby protecting both the interests of the government and those of legitimate importers and businesses.