EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608339
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.
Invacare Australia Pty Ltd applied for a TCO in respect of certain portable disabled beds parts on 15 May 2006.
Instrument
TCO No 0608339 was made on 21 July 2006. It declares that those certain portable disabled beds parts 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. 0608339 is taken to have come into force on 15 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. 0608339 was enacted under the Customs Act 1901 to address the issue of providing tariff concessions for specific imported goods. This legislation allows for the reduction of customs duty rates for certain goods, thereby addressing the problem of high tariffs on particular imported items which could otherwise hinder their affordability and accessibility in the Australian market. This instrument was introduced by the Chief Executive Officer of Customs in response to an application from Invacare Australia Pty Ltd for tariff concessions on certain portable disabled beds parts. The policy objective is to ensure that the application of tariff concessions does not disadvantage any person and does not impose any new liabilities on individuals, while potentially benefiting importers by allowing them to apply for refunds of duties paid on the specified goods since the commencement date of the concession. The instrument came into force on the date the application was lodged, 15 May 2006, and no submissions were received in opposition to the concession.
Scope and Application
The Customs Act 1901 provides a framework under which Tariff Concession Orders (TCOs) can be made by the Chief Executive Officer of Customs (the CEO). These orders grant lower rates of customs duty on specific goods, provided that certain criteria are met. Applications for TCOs can be made by any person, and if the CEO is satisfied that the application meets the core criteria, a written order will be issued, effectively lowering the duty on the specified goods. The application process involves assessing whether substitutable goods are produced in Australia and whether the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. TCO No. 0608339, for instance, was issued for certain portable disabled beds parts, reducing the duty rate from 5% to 0%. The TCO applies nationally across Australia and does not disadvantage any existing rights or impose new liabilities on individuals or entities. This concession is particularly beneficial for importers who can apply for a refund of duty on goods imported since the effective date of the TCO.
Key Provisions
The Customs Act 1901 (the Act) provides a framework under which Tariff Concession Orders (TCOs) may be made by the Chief Executive Officer of Customs (the CEO). Section 269F of the Act allows for an application to the CEO for a TCO in respect of goods, provided they are not specified in section 269SJ. If the CEO is satisfied that the application meets the core criteria under section 269C, they must make a written order (a TCO) specifying that the goods are subject to a prescribed item of Schedule 4 to the Customs Tariff Act 1995 (the Tariff). In this instance, TCO No. 0608339, made on 21 July 2006, declared that certain portable disabled beds parts are subject to a 0% duty rate under item 50 of Schedule 4 to the Tariff, following the CEO's satisfaction that no substitutable goods were produced in Australia.
The Act imposes several obligations on the parties involved in the TCO process. The CEO must ensure that the application meets the core criteria, which includes verifying that no substitutable goods were produced in Australia on the date the application was lodged, as outlined in section 269C. Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to lodge a submission if they believe the TCO should not be made, as stipulated in subsection 269K(1). The TCO process also requires the CEO to consider and respond to any submissions received in relation to the application.
Breaching the obligations set forth in the Customs Act 1901 can lead to serious consequences. While the Act does not explicitly outline specific penalties for non-compliance with TCO requirements, it does establish a framework for enforcement and compliance within the broader customs regulations. Failure to adhere to the provisions of the Act could result in legal action, fines, or other civil and criminal penalties as prescribed by relevant legislation. The Act ensures that the rights of persons, other than the Commonwealth, are not adversely affected by the TCO, and it does not impose any liabilities on any person in respect of actions taken before the TCO's registration date.