EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0513592
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.
Pexim Australia Pty Ltd applied for a TCO in respect of certain washers and dryers on 23 December 2005.
Instrument
TCO No 0513592 was made on 17 March 2006. It declares that those certain washers and dryers 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. 0513592 is taken to have come into force on 23 December 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, provides a framework for the imposition and remission of customs duty on goods entering Australia. To address gaps in the application of duty to specific goods and to foster economic benefits by facilitating trade, the Act incorporates a scheme allowing for the creation of Tariff Concession Orders (TCOs) through the Chief Executive Officer of Customs (CEO). These orders, as seen in Tariff Concession Instrument No. 0513592, provide for reduced customs duty rates on specified goods, in this instance certain washers and dryers, under certain conditions. The policy objective is to ensure that goods subject to TCOs are not replaceable by Australian-made alternatives, thereby supporting import and economic activity. The explanatory statement for this instrument details that no objections were raised during the consultation period, and the concession came into effect on the date the application was lodged, ensuring the rights of importers are protected without imposing new liabilities.
Scope and Application
The Tariff Concession Instrument No. 0513592 under the Customs Act 1901 applies to individuals or entities that seek tariff concessions on specific goods imported into Australia, provided these goods are not listed in section 269SJ of the Act as ineligible for such concessions. This instrument particularly pertains to Pexim Australia Pty Ltd's application for certain washers and dryers, which now attract a 0% duty rate as opposed to the general 5% duty. The Act's jurisdiction extends nationally, as it is a Commonwealth Act, and it applies to all states and territories within Australia. The Act does not specify exclusions other than those mentioned in section 269SJ, which likely includes goods that pose a risk to public health, safety, or the environment, or that are subject to other legislative controls. The instrument does not disadvantage any person except the Commonwealth and imposes no liabilities on anyone other than the Commonwealth, safeguarding the rights of importers who can apply for duty refunds on goods imported since the TCO's effective date of 23 December 2005. The application process for TCOs is further regulated through the Customs Regulations 1993, which may include additional criteria and procedures.
Key Provisions
The key provisions of Tariff Concession Instrument No. 0513592 are found in sections 269C, 269F, 269P, and 269S of the Customs Act 1901. Section 269F allows a person to apply to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) in respect of goods, provided the goods are not specified in section 269SJ, which lists goods that cannot be subject to a TCO. If the CEO is satisfied that the application meets the core criteria, as outlined in section 269C, the CEO must make a written order declaring that the goods are subject to a prescribed rate of duty specified in Schedule 4 of the Customs Tariff Act 1995. In this case, the CEO made a TCO for certain washers and dryers, declaring that they are subject to a duty rate of 0% instead of the general rate of 5%.
The Act imposes several obligations on the parties involved. Firstly, any person applying for a TCO must ensure that their application meets the core criteria, which includes proving that no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (section 269C). The CEO, on receiving a valid application, must publish a notice in the Gazette inviting any person who believes the TCO should not be made to lodge a submission (subsection 269K(1)). The CEO must then consider these submissions before making a decision. In this case, no submissions were received, allowing the CEO to proceed with the TCO.
Failure to comply with the requirements of the Customs Act 1901 may result in civil or criminal penalties. While the Explanatory Statement does not detail specific offences or penalties, general provisions within the Customs Act 1901 outline that breaches of the Act may lead to fines or imprisonment, depending on the severity of the offence. For instance, under section 261 of the Act, a person who knowingly or recklessly makes a false statement in an application for a TCO may be liable for a penalty of up to $22,200 or imprisonment for up to two years, or both. Additionally, any person who knowingly imports goods that do not comply with the terms of a TCO may also face penalties.
In summary, Tariff Concession Instrument No. 0513592 provides a lower rate of customs duty for certain washers and dryers, subject to the core criteria being met and the absence of any submissions opposing the TCO. The Act mandates that applicants ensure their applications meet the necessary criteria and that the CEO considers any submissions received. Breaches of the Act may result in civil or criminal penalties, highlighting the importance of compliance with its provisions.