EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0510610
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.
Chubb Fire Safety applied for a TCO in respect of certain Fire Extinguishers on 11 August 2005.
Instrument
TCO No 0510610 was made on 21 October 2005. It declares that those certain Fire Extinguishers 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. 0510610 is taken to have come into force on 11 August 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. 0510610 was enacted in 2005 under the Customs Act 1901 to provide tariff concessions for certain fire extinguishers, specifically those applied for by Chubb Fire Safety. The Act, enacted by the Commonwealth Parliament, provides a framework for the Chief Executive Officer of Customs to grant tariff concessions via Tariff Concession Orders (TCOs) for goods not produced in Australia, thereby reducing customs duty rates. The policy objective of this instrument is to support Australian businesses by lowering the duty on imported goods where no domestic alternatives exist, thus potentially lowering consumer prices and increasing competitiveness. This specific TCO reduced the duty on the specified fire extinguishers from 5% to 0%, effective from the date of the application, 11 August 2005. No submissions were received in opposition to this concession, and the order does not affect any existing rights or impose new liabilities on persons other than the Commonwealth.
Scope and Application
The Tariff Concession Instrument No. 0510610 under the Customs Act 1901 applies to goods specified in the instrument, namely certain Fire Extinguishers, for which a Tariff Concession Order (TCO) has been granted. The Act allows for the reduction of customs duty on goods that are subject to a TCO, provided that the application meets the core criteria set out in the Act. In this case, the Chief Executive Officer of Customs (CEO) determined that the application from Chubb Fire Safety for a TCO on certain Fire Extinguishers met these criteria, leading to the issuance of TCO No. 0510610. The geographic reach of this legislation is national, as it pertains to the Customs Act 1901, which is a Commonwealth Act. The TCO applies from the date the application was lodged, which was 11 August 2005, and the new duty rate of 0% applies to the specified goods from that date.
The Act excludes certain goods from being subject to a TCO, specifically those outlined in section 269SJ of the Customs Act 1901, which includes goods that are considered harmful or pose a significant risk to public safety or health. In this instance, the CEO was satisfied that the Fire Extinguishers did not fall under these exclusions. The application of the TCO is further governed by subordinate instruments such as the Customs Regulations 1995, which include provisions for the refund of duty to importers. The TCO does not disadvantage any person or impose liabilities on anyone in respect of actions taken prior to its registration.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0510610 under the Customs Act 1901 pertain to the creation and effect of Tariff Concession Orders (TCOs) for specific goods. According to section 269F (subsection 269K(1)), any person can apply to the Chief Executive Officer of Customs (CEO) for a TCO concerning particular goods. If the application is deemed valid and not involving goods specified in section 269SJ, the CEO must decide if it meets the core criteria, as outlined in section 269C. This includes ensuring that no substitutable goods were produced in Australia at the time of the application (section 269C). If the CEO confirms these criteria are met, they must issue a written order (section 269P(3)) specifying the goods and the applicable tariff item (Schedule 4 to the Customs Tariff Act 1995). In this case, the CEO issued TCO No. 0510610 on 21 October 2005, declaring that certain fire extinguishers are subject to a 0% duty rate, as per item 50 of Schedule 4.
The Customs Act 1901 imposes several obligations on the parties involved in the TCO process. For applicants, it is crucial to ensure their application meets the core criteria, as outlined in sections 269C and 269B. The CEO, on the other hand, must accept valid applications, assess whether they meet the core criteria, and publish a notice in the Gazette inviting submissions from any interested parties, as stipulated in subsection 269K(1). Additionally, the CEO must refrain from making TCOs for goods specified in section 269SJ, which are ineligible for tariff concessions. The Act also mandates that the TCO must not disadvantage any person other than the Commonwealth and should not impose liabilities for actions taken before the TCO's effective date.
Failure to comply with the provisions of the Customs Act 1901 regarding TCOs may result in various penalties and consequences. While the Act does not explicitly state maximum penalties for breaches, any non-compliance could lead to civil or criminal actions. For instance, submitting a false application or misrepresenting information could be considered fraudulent, potentially leading to criminal charges under the Crimes Act 1914. Additionally, any misuse of the tariff concession or failure to adhere to the conditions set by the CEO could result in civil penalties, including fines and the requirement to repay any duties improperly claimed or received. The specifics of these penalties would depend on the nature and severity of the breach.