EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0508474
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.
Invacare Australia Pty Ltd applied for a TCO in respect of certain Portable Disabled Beds on 8 July 2005.
Instrument
TCO No 0508474 was made on 9 September 2005. It declares that those certain Portable Disabled Beds 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. 0508474 is taken to have come into force on 8 July 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 Australian Parliament, establishes the framework for the regulation of customs and excise duties in Australia. This legislation introduced a mechanism through which Tariff Concession Orders (TCOs) could be applied for and granted by the Chief Executive Officer of Customs, providing a pathway to reduce or eliminate customs duties on certain imported goods. The objective of this initiative was to support industries by making imported goods more competitively priced, thereby encouraging trade and economic growth. Tariff Concession Instrument No. 0508474, made under this Act, is an example of how the scheme operates in practice, providing a zero per cent customs duty rate on certain Portable Disabled Beds, as no substitutable goods were being produced in Australia at the time of the application. This specific instrument reflects the policy objective of reducing the financial burden on importers and consumers, thereby fostering a more competitive market environment.
Scope and Application
The Tariff Concession Instrument No. 0508474, pursuant to the Customs Act 1901, applies to individuals and entities seeking tariff concessions for specific goods, ensuring these goods are not substitutable by products manufactured domestically and are not among those prohibited by section 269SJ of the Act. The instrument has a Commonwealth jurisdictional reach, allowing the Chief Executive Officer of Customs to decide on tariff concession applications. The instrument specifically applies to certain Portable Disabled Beds, as exemplified by Invacare Australia Pty Ltd’s application, and reduces the duty from a general rate of 5% to 0%. It does not disadvantage any persons other than the Commonwealth and does not impose any liabilities. Any interested parties can submit objections, although none were received in this case. The TCO No. 0508474 came into effect on 8 July 2005, the date the application was lodged, and benefits importers by allowing them to apply for a refund of duty on goods imported since that date.
Key Provisions
The main operative sections of Tariff Concession Instrument No. 0508474 are sections 269C, 269F, 269P, and 269S. Section 269F (1) allows a person to apply to the Chief Executive Officer of Customs (CEO) for a Tariff Concession Order (TCO) concerning certain goods, provided that these goods are not those specified in section 269SJ, which outlines goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria set out in section 269C, they must make a written order (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 applies. Section 269P(3) mandates that the CEO must make such a written order if satisfied that the application meets the core criteria. This specific TCO, No. 0508474, made on 9 September 2005, declares that certain Portable Disabled Beds are goods to which item 50 of Schedule 4 to the Tariff applies, resulting in a duty rate of 0% instead of the general rate of 5%.
The obligations and requirements imposed by the Act on the parties it governs include the necessity for an applicant to ensure their application does not pertain to goods specified in section 269SJ and that the application meets the core criteria outlined in section 269C. For the CEO, the obligations include accepting a valid application, determining whether it meets the core criteria, and making a written TCO if satisfied. Additionally, the CEO must publish a notice in the Gazette inviting any interested parties to submit reasons why the TCO should not be made. This requirement is specified in subsection 269K(1) of the Act, although in this case, no submissions were received.
The consequences of breaching the requirements or obligations outlined in the Act can include both civil and criminal penalties. While the specific penalties are not detailed in the explanatory statement, breaches of the Customs Act 1901 can generally lead to fines and, in severe cases, imprisonment. For example, under section 26 of the Customs Act, penalties can include fines of up to $22,200 for individuals and $111,000 for bodies corporate, along with potential imprisonment terms. These penalties underscore the importance of compliance with the Act’s provisions to avoid legal repercussions.