EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0606248
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.
Walk on Wheels NSW Pty Ltd applied for a TCO in respect of certain disabled chairs on 6 April 2006.
Instrument
TCO No 0606248 was made on 30 June 2006. It declares that those certain disabled chairs 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. 0606248 is taken to have come into force on 6 April 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 Commonwealth Parliament, was amended to introduce the scheme under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs. This was to address the need for providing tariff concessions on certain goods, thereby encouraging trade and reducing costs for specific products. The legislation allows for a lower rate of customs duty on goods specified in a TCO, provided that no substitutable goods are produced in Australia at the time of application. The explanatory statement for Tariff Concession Instrument No. 0606248, made on 30 June 2006, indicates that the instrument was introduced following an application by Walk on Wheels NSW Pty Ltd for tariff concessions on certain disabled chairs, with the rate of duty reduced from 5% to 0%. The instrument ensures that the rights of importers are positively affected, enabling them to apply for refunds of duty on goods imported since the effective date of the concession.
Scope and Application
The Tariff Concession Instrument No. 0606248 under the Customs Act 1901 applies to specific goods, namely certain disabled chairs, for which Walk on Wheels NSW Pty Ltd made an application to the Chief Executive Officer of Customs (CEO) on 6 April 2006. The Act provides a framework for the CEO to consider and, if certain criteria are met, grant a Tariff Concession Order (TCO) that reduces the customs duty on these goods from the general rate to zero. This order is applicable to the entities involved in the import of these goods and directly impacts the duty they are required to pay. The scope of the Act extends across the Commonwealth of Australia, but it is specific to the goods for which the TCO has been granted. The Act does not apply to goods specified in section 269SJ, which are ineligible for TCOs, and it does not affect the rights of any person other than the Commonwealth in respect of anything done before the date of registration. The CEO is mandated to publish notices inviting objections to TCO applications, although in this case, no submissions were received. The instrument came into effect on 6 April 2006, the date on which the application was lodged.
Key Provisions
The key operative sections of the Tariff Concession Instrument No. 0606248 under the Customs Act 1901 (the Act) include sections 269C, 269F, and 269P. Section 269F (1) allows for the application to be made to the Chief Executive Officer of Customs (the CEO) for a Tariff Concession Order (TCO) concerning goods. Section 269C (1) requires the CEO to determine whether the application meets the core criteria, which is based on the absence of substitutable goods produced in Australia in the ordinary course of business. Section 269P (3) mandates that if the application meets these criteria, the CEO must issue a written TCO, specifying the applicable prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff).
The obligations imposed on the parties or entities governed by this Act include the requirement for applicants to ensure that their applications for a TCO are made in accordance with the provisions of the Act. The CEO must review the application to ascertain whether the core criteria are satisfied and, if so, proceed to issue a TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting any interested parties to submit their views on the application, although in this case, no submissions were received.
Breach of the provisions of the Customs Act 1901, including the failure to comply with the requirements for issuing a TCO, can result in penalties. While the specific penalties are not detailed in the explanatory statement, it is noted that the Act provides for both civil and criminal penalties for non-compliance. The exact penalties, however, are prescribed elsewhere within the Customs Act and associated regulations, and may include fines and imprisonment for more serious breaches.