EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0608561
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.
Easyware Products Pty Ltd applied for a TCO in respect of certain scouring heads on 17 May 2006.
Instrument
TCO No 0608561 was made on 04 August 2006. It declares that those certain scouring heads 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 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. 0608561 is taken to have come into force on 17 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 Customs Act 1901, enacted by the Parliament of Australia, provides a framework under which the Chief Executive Officer of Customs can issue Tariff Concession Orders (TCOs) to reduce customs duty on certain goods. This legislative framework addresses the problem of high customs duties on goods that do not have substitutable domestic alternatives. In this context, TCO No. 0608561, made on 4 August 2006, was introduced to grant tariff concessions to Easyware Products Pty Ltd for certain scouring heads, following their application on 17 May 2006. The instrument specifies that these goods, which are otherwise subject to a 5% duty rate, will now be duty-free. The policy objective of this concession is to support the availability and affordability of these goods in the Australian market by reducing the financial burden on importers.
Scope and Application
The Tariff Concession Instrument No. 0608561 under the Customs Act 1901 applies to goods specified in the instrument, in this case, certain scouring heads, and is targeted at entities and individuals involved in the importation of these goods. The legislation operates on a Commonwealth level, as it involves the Chief Executive Officer of Customs making an order that applies a lower rate of customs duty. The application process for a Tariff Concession Order (TCO) is detailed in section 269F of the Act, which allows for an application to be made by a person for goods that are not specified in section 269SJ of the Act, which lists goods that are ineligible for tariff concessions. The instrument was created after Easyware Products Pty Ltd applied for a TCO on 17 May 2006, and it came into force on the same day as per the provisions of the Act. The TCO ensures that no person, other than the Commonwealth, is disadvantaged or imposed with liabilities for actions taken prior to the instrument's registration. Additionally, the Act extends its application through subordinate instruments such as the Customs Tariff Act 1995, which specifies the rates of duty applicable to the goods in question.
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 (CEO) for a Tariff Concession Order (TCO) in respect of certain goods. If the CEO is satisfied that the application meets the core criteria specified in section 269C, they must make a written order (TCO) declaring that the goods are subject to a prescribed tariff item, which often results in a lower rate of customs duty (section 269P). In this case, the CEO issued TCO No. 0608561 for certain scouring heads, declaring that they are subject to item 50 of Schedule 4 to the Tariff, with a resulting duty rate of free.
The obligations imposed by the Act on the parties it governs primarily pertain to the application and assessment process for TCOs. For the applicant, it involves lodging a valid application with the CEO, ensuring that the goods in question are not specified in section 269SJ of the Act, which lists goods that cannot be subject to a TCO. The CEO, on the other hand, has the responsibility of assessing whether the application meets the core criteria, defined in section 269C, and publishing a notice in the Gazette inviting submissions from interested parties. If no submissions are received, as in the case of TCO No. 0608561, the CEO must proceed to make the TCO.
Breaches of the provisions under the Customs Act 1901 can lead to various civil and criminal consequences. Section 270 of the Act stipulates penalties for non-compliance with the Act's requirements, which can include fines and imprisonment. Specifically, subsection 270(1) provides for a penalty of up to 10,000 penalty units for serious offences, while subsection 270(2) provides for a penalty of up to 1,100 penalty units for other offences. The exact penalties depend on the nature and severity of the breach. Additionally, under section 271, the Act allows for the seizure and forfeiture of goods that are the subject of an offence under the Act.
For the specific TCO in question, while the Act provides for potential penalties for non-compliance, the TCO itself does not introduce additional penalties but rather affects the customs duty rates for the specified goods. The rights of importers are beneficially affected by the TCO, allowing them to apply for a refund of duty on goods imported since the day the TCO is taken to have come into force. However, the TCO does not impose any liabilities on any person for actions taken before the TCO's effective date, ensuring that no existing rights or obligations are adversely affected.