EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0607233
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.
Parex Industries Ltd applied for a TCO in respect of certain steam mop cleaning cloths on 20 April 2006.
Instrument
TCO No 0607233 was made on 7 July 2006. It declares that those certain steam mop cleaning cloths 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 7.5%. 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. 0607233 is taken to have come into force on 20 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 Tariff Concession Instrument No. 0607233 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions on specific imported goods that are not produced domestically. This instrument was introduced to provide relief to importers and consumers by reducing or eliminating customs duty on certain goods, thereby promoting fair trade and economic efficiency. The instrument was created by the Chief Executive Officer of Customs (CEO) in response to an application from Parex Industries Ltd for tariff concessions on specific steam mop cleaning cloths. The CEO determined that these goods qualified for the concessions as no substitutable goods were being produced in Australia at the time of the application, aligning with the core criteria outlined in the Customs Act. The Tariff Concession Order (TCO) was published in the Gazette with an invitation for public submissions, none of which were received, leading to the issuance of the TCO. The TCO provides that these steam mop cleaning cloths are subject to a duty rate of free, down from the general rate of 7.5%, effective from the date the application was lodged, 20 April 2006. This legislative measure ensures that the rights of importers are protected, and no new liabilities are imposed on any person as a result of the concession.
Scope and Application
The Tariff Concession Instrument No. 0607233, made under the Customs Act 1901, applies to specific goods for which a Tariff Concession Order (TCO) has been made by the Chief Executive Officer of Customs. This particular instrument pertains to certain steam mop cleaning cloths for which Parex Industries Ltd applied on 20 April 2006. The TCO, issued on 7 July 2006, grants a concession such that these steam mop cleaning cloths are subject to a zero rate of customs duty, down from the general rate of 7.5%. This concession is applicable nationally and comes into effect from the date the application was lodged, i.e., 20 April 2006. The Act mandates that the CEO must be satisfied that no substitutable goods are produced in Australia for the application to meet the core criteria, which was the case here. The TCO does not affect any existing rights of persons other than the Commonwealth and does not impose any liabilities on any person, though it does entitle importers to apply for duty refunds on imports of these goods from the effective date of the TCO.
Key Provisions
The main operative sections of this legislation are sections 269C, 269F, and 269P 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). Section 269C requires that for the CEO to consider the application, the goods in question must meet the core criteria, which primarily involves ensuring that no substitutable goods are produced in Australia in the ordinary course of business. Section 269P(3) mandates that if the CEO is satisfied that the application meets the core criteria, they must make a written order (the TCO) specifying the reduced rate of customs duty applicable to the goods. In this case, TCO No. 0607233 specifies that certain steam mop cleaning cloths are to be taxed at a rate of zero percent.
The Act imposes several obligations and requirements on the parties it governs. Firstly, any person wishing to apply for a TCO must ensure their application meets the core criteria, particularly that no substitutable goods are produced in Australia. The CEO has the responsibility to review these applications and determine whether they satisfy the criteria. Additionally, the CEO must publish a notice in the Gazette inviting submissions from any interested parties who believe the TCO should not be granted. If no submissions are received, the CEO proceeds with the order. The Act also stipulates that the TCO does not affect the rights of any person as at the date of registration in a way that would disadvantage them or impose new liabilities.
Offences and penalties for breaches of this legislation are not explicitly stated in the provided text. However, given the regulatory nature of the Customs Act 1901, non-compliance with the terms of a TCO could potentially lead to civil or criminal penalties under broader customs legislation. For example, misleading or fraudulent claims in a TCO application could result in penalties under sections related to false statements or fraud in customs matters. Additionally, failing to comply with the terms of a granted TCO, such as improperly claiming tariff concessions, could lead to financial penalties, prosecution, and other legal consequences as outlined in the Customs Act and related regulations.