EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0605623
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.
Garhold Pty Ltd applied for a TCO in respect of certain plastic bidets on 23 March 2006.
Instrument
TCO No 0605623 was made on 16 June 2006. It declares that those certain plastic bidets 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. 0605623 is taken to have come into force on 23 March 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 Tariff Concession Instrument No. 0605623, enacted in 2006, is an instrument under the Customs Act 1901. It was introduced to provide a tariff concession for certain plastic bidets, reducing the customs duty rate from 5% to 0%. This was achieved through the process outlined in Part XVA of the Customs Act, whereby the Chief Executive Officer of Customs can make Tariff Concession Orders if specific criteria are met. The policy objective, as implied by the instrument, is to support Australian importers by reducing the cost of certain goods through tariff concessions where applicable.
The instrument was enacted following an application by Garhold Pty Ltd for a Tariff Concession Order concerning plastic bidets. After determining that no substitutable goods were produced in Australia, the CEO issued the order on 16 June 2006, effective from 23 March 2006. This order ensures that importers can benefit from the reduced duty rate and may apply for duty refunds on goods imported since the commencement date of the concession. The process included a public consultation period, though no submissions were received in response to the published notice.
Scope and Application
The Tariff Concession Instrument No. 0605623, made under the Customs Act 1901, applies specifically to certain plastic bidets imported into Australia. This instrument was created in response to an application by Garhold Pty Ltd, and it grants a concession on the customs duty for these goods, reducing the duty from the general rate of 5% to 0%. This concession applies to the goods specified in item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument is effective from the date the application was lodged, which is 23 March 2006, and it does not affect the rights of any person as they stood before the application date. The concession is limited to the goods specified in the application and does not extend to any other goods, ensuring that the scope of the concession remains narrowly tailored to the particular circumstances of the application. The instrument does not impose any liabilities on any person, and importers of the affected goods can apply for a refund of duty paid on these goods since the effective date of the concession.
Key Provisions
The Tariff Concession Order (TCO) No. 0605623, made under section 269F of the Customs Act 1901, sets out the conditions for tariff concessions on certain plastic bidets, specifying that these goods are subject to a 0% duty rate instead of the general 5% duty rate (section 269P(3)). This order is effective from 23 March 2006, the date on which the application for the concession was lodged (subsection 269S(1)). The TCO application process requires the Chief Executive Officer of Customs (CEO) to determine whether the goods in question are substitutable by any goods produced in Australia in the ordinary course of business (section 269C). In this case, the CEO found no such substitutable goods, leading to the concession.
The Act imposes obligations on applicants, such as Garhold Pty Ltd, to ensure their applications for tariff concessions meet the core criteria, including providing detailed information about the goods and their production status in Australia. Once an application is accepted as valid, the CEO must publish a notice in the Gazette inviting submissions from any interested parties (subsection 269K(1)). If no submissions are received, as in this case, the CEO proceeds to make the TCO. Additionally, the CEO must ensure that the TCO does not disadvantage any person other than the Commonwealth and does not impose any liabilities for actions taken before the TCO's registration date (subsection 269S(2)).
Under the Customs Act 1901, failure to comply with the requirements for a TCO can lead to various consequences. Firstly, if an entity fails to meet the core criteria for a tariff concession, the CEO is not obligated to issue a TCO, leaving the goods subject to the general duty rate. Secondly, if any misrepresentation or incorrect information is found in the application, the CEO may reject the application, and the entity may face civil or criminal penalties if found to have intentionally provided false information. The specific penalties are not detailed in the explanatory statement, but they could include fines or other sanctions as prescribed under the Act. The Act also provides for potential civil or criminal liabilities for those who knowingly provide incorrect information or engage in fraudulent activities related to tariff concessions.