EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608077
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.
Hale Imports Pty Ltd applied for a TCO in respect of certain stainless steel cookware on 9 May 2006.
Instrument
TCO No 0608077 was made on 21 July 2006. It declares that those certain stainless steel cookware 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. 0608077 is taken to have come into force on 9 May 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. 0608077 was enacted in 2006 under the Customs Act 1901 to address the need for tariff concessions for specific imported goods. This legislative instrument was created to allow the Chief Executive Officer of Customs to provide lower customs duty rates on certain goods, provided they meet specific criteria. This mechanism helps to ensure that Australian industries are not unfairly disadvantaged by the importation of similar goods produced overseas, thereby supporting local manufacturing and economic stability. The policy objective is to provide relief to industries that do not produce substitutable goods domestically, allowing them to remain competitive in the market.
The instrument was developed following an application by Hale Imports Pty Ltd for tariff concessions on certain stainless steel cookware. After determining that no substitutable goods were produced in Australia, the CEO issued the Tariff Concession Order, reducing the duty rate from 5% to 0% for these goods, effective from the date of the application, 9 May 2006. The decision was made without any objections, highlighting the alignment of the order with broader economic policies aimed at fostering fair trade practices.
Scope and Application
The Tariff Concession Instrument No. 0608077, made under Part XVA of the Customs Act 1901, applies to specific stainless steel cookware imported into Australia and pertains to the application of a lower rate of customs duty as stipulated in the Customs Tariff Act 1995. This instrument is relevant for entities and individuals involved in the importation of these particular goods, aiming to provide a concession by reducing the duty rate from the general 5% to 0%. The geographic scope of this legislation is national, applying across the Commonwealth of Australia, as it concerns the importation of goods into the country. Notably, the application of this concession is contingent upon the condition that no substitutable goods are produced in Australia in the ordinary course of business at the time of the application, ensuring that the concession does not undermine local production. The application process requires adherence to the Act's provisions, including the opportunity for public submissions, which in this case did not yield any objections. The instrument came into effect on 9 May 2006, the date the application was lodged, and does not retroactively affect the rights of any parties or impose liabilities for actions taken prior to its registration.
Key Provisions
The Tariff Concession Instrument No. 0608077 under the Customs Act 1901 (the Act) contains the key operative sections that pertain to the creation and application of Tariff Concession Orders (TCOs) (sections 269C, 269B, 269E, 269D, and 269P). These sections establish the conditions under which the Chief Executive Officer of Customs (the CEO) can make a TCO, which reduces the rate of customs duty on specified goods. For a TCO to be granted, the application must meet core criteria, including the absence of substitutable goods produced in Australia (section 269C), and the CEO must determine that no substitutable goods were produced in Australia on the day the application was lodged (section 269P(3)). If these criteria are met, the CEO issues a written order, declaring the goods to which the TCO applies, as specified in Schedule 4 to the Customs Tariff Act 1995.
The Act imposes specific obligations on applicants and the CEO. Applicants must ensure their TCO applications meet the core criteria and avoid applying for goods specified in section 269SJ of the Act, which are ineligible for TCOs. The CEO is obligated to evaluate the application against these criteria, publish a notice in the Gazette inviting submissions if the application is accepted as valid (subsection 269K(1)), and decide whether to issue a TCO. The CEO did not receive any submissions for TCO No. 0608077, which concerned certain stainless steel cookware. The TCO is effective from the date the application was lodged (subsection 269S(1)), which for this TCO was 9 May 2006. Importantly, the TCO does not disadvantage any person other than the Commonwealth or impose new liabilities on such persons regarding actions taken before the TCO's registration date.
The Act also outlines potential consequences for breaches of its provisions. Although the Explanatory Statement does not detail specific offences or penalties for non-compliance with TCOs, breaches of the Customs Act 1901 generally can lead to civil or criminal penalties. Under the Act, unauthorised importation of goods can result in fines and imprisonment, with penalties varying based on the severity of the offence and the value of the goods involved. Additionally, failure to comply with regulations or orders made under the Act can incur civil penalties, including fines, which can be significant depending on the breach's nature and the regulatory framework governing the specific circumstances. These provisions underscore the importance of adhering to the statutory requirements when applying for or managing TCOs.