EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0603415
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.
Auction Alliance Pty Ltd applied for a TCO in respect of certain circular swimming pools on 3 February 2006.
Instrument
TCO No 0603415 was made on 18 April 2006. It declares that those certain circular swimming pools 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. 0603415 is taken to have come into force on 3 February 2006.
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 a framework within which the Chief Executive Officer of Customs can make Tariff Concession Orders (TCOs) to apply lower rates of customs duty on certain goods. This Act was introduced to address the need for a streamlined process to provide tariff relief on goods that are not produced in Australia, thereby supporting importers and potentially stimulating competition within the market. The 2006 Tariff Concession Instrument No. 0603415, which was made under this Act, specifically provides for a tariff concession on certain circular swimming pools, reducing the customs duty rate from 5% to free. This concession was granted following an application by Auction Alliance Pty Ltd, and the instrument came into force on the date the application was lodged, 3 February 2006, with no submissions received in opposition to the concession.
Scope and Application
The Tariff Concession Instrument No. 0603415, made under the Customs Act 1901, applies to certain circular swimming pools which were the subject of an application for tariff concession by Auction Alliance Pty Ltd on 3 February 2006. The instrument was issued on 18 April 2006 and it declares that these specific swimming pools are subject to a concessional rate of duty as per item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively making the duty rate free, whereas the general rate is 5%. The scope of this legislation is limited to the specific goods identified in the application and the TCO does not affect any pre-existing rights or impose any liabilities on persons other than the Commonwealth. This concession is applicable from the date the application was lodged, meaning that importers of these goods can apply for a refund of duty on imports made since 3 February 2006, as per the Customs Act and Regulations. The Act does not extend to goods specified in section 269SJ of the Customs Act, which are ineligible for tariff concessions.
Key Provisions
The primary sections of Tariff Concession Instrument No. 0603415 (F2006L01186) under the Customs Act 1901, establish the process and criteria for the making of a Tariff Concession Order (TCO) (ss 269F, 269C). These sections specify that an application can be made to the Chief Executive Officer of Customs (CEO) for a TCO in respect of goods, provided the goods are not specified in section 269SJ of the Act as ineligible for such concessions. The CEO is mandated to consider the application against the core criteria, primarily whether no substitutable goods were produced in Australia in the ordinary course of business on the day the application was lodged (s 269C). If the CEO determines that the application meets these criteria, a written order must be issued declaring the goods to which the concession applies (s 269P(3)).
The obligations under this legislation primarily fall on the CEO, who must ensure that applications for TCOs are processed according to the statutory criteria, and on applicants who must substantiate that the goods in question meet the eligibility requirements for a concession. Specifically, applicants must demonstrate that no substitutable goods were produced in Australia in the ordinary course of business on the date of the application (s 269D, s 269E). Additionally, the CEO is required to publish a notice in the Gazette, inviting submissions from any interested parties on the proposed TCO (s 269K(1)), although no submissions were received in response to the notice for this particular instrument.
The Act stipulates that if a breach of any provision occurs, it could lead to civil or criminal consequences, although the Explanatory Statement does not provide specific details on the nature of these consequences or associated penalties. Typically, breaches of customs regulations can lead to fines or imprisonment, but the exact penalties would be determined by the relevant sections of the Customs Act 1901 or other applicable legislation. It is important to note that the TCO itself does not impose any liabilities on any person and does not affect the rights of any person as at the date of registration to disadvantage that person or impose liabilities in respect of anything done or omitted to be done before the date of registration (s 269S(1)).