EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0611314
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.
B & R Enclosures applied for a TCO in respect of certain coolers on 3 July 2006.
Instrument
TCO No 0611314 was made on 29 September 2006. It declares that those certain coolers 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. 0611314 is taken to have come into force on 3 July 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, provides the legislative framework for the administration of customs and excise in Australia. Specifically, it addresses the need for a streamlined process to grant tariff concessions on imported goods, thereby facilitating trade and economic efficiency. The introduction of Tariff Concession Orders (TCOs) under Part XVA of the Act allows the Chief Executive Officer of Customs to reduce customs duty rates on certain imported goods, provided that no substitutable goods are produced in Australia. This mechanism was introduced to ensure that Australian industries are protected from unfair competition, while also allowing for the competitive importation of goods that are not produced domestically. The policy objective is to promote economic growth by enabling the importation of goods at reduced tariff rates, thereby supporting businesses that rely on imported materials or products.
Scope and Application
The Tariff Concession Instrument No. 0611314, under the Customs Act 1901, applies to any person or entity seeking tariff concessions on specific goods, in this case coolers, and is administered by the Chief Executive Officer of Customs. The legislation specifically targets the import of goods for which a Tariff Concession Order (TCO) can be applied, provided the goods are not specified in section 269SJ of the Act, which excludes certain goods from being subject to a TCO. The Act applies across the Commonwealth of Australia, and its jurisdictional reach extends to all entities involved in the importation of goods subject to a TCO. The application process for a TCO requires that the goods in question have no substitutable products produced in Australia, as defined under section 269C of the Act, and the CEO must make a written order if the application meets the core criteria. This instrument is effective from the date the application was lodged, which in this case was 3 July 2006. The TCO does not disadvantage any person, other than the Commonwealth, and does not impose any liabilities on any person for actions taken prior to the TCO's registration. Importers, however, will benefit from the ability to apply for a refund of duty on the goods imported since the commencement date of the TCO.
Key Provisions
The Tariff Concession Instrument No. 0611314 under the Customs Act 1901 provides a lower rate of customs duty for certain coolers, as declared in item 50 of Schedule 4 to the Customs Tariff Act 1995. This instrument was made by the Chief Executive Officer of Customs (CEO) on 29 September 2006, following an application by B & R Enclosures on 3 July 2006. According to section 269P(3) of the Customs Act 1901, the CEO must make a written order if satisfied that the application meets the core criteria, which include the absence of substitutable goods produced in Australia on the date of the application. For these coolers, the general rate of duty drops from 5% to 0%.
Under the Customs Act 1901, the CEO has a duty to assess the application against the core criteria set out in sections 269C, 269B, and 269D. If these criteria are satisfied, the CEO must issue a Tariff Concession Order (TCO). In this case, the CEO determined that no substitutable goods were produced in Australia in the ordinary course of business, thereby meeting the criteria for the TCO. The TCO has been effective since the date the application was lodged, 3 July 2006, as per subsection 269S(1) of the Customs Act 1901.
The obligations imposed by the Customs Act 1901 on the CEO include accepting valid TCO applications, evaluating them against the core criteria, and, if appropriate, issuing a TCO. Additionally, under subsection 269K(1), the CEO must publish a notice in the Gazette inviting submissions from any interested parties. In this instance, the CEO published such a notice but received no submissions opposing the TCO. Furthermore, the Act ensures that the TCO does not disadvantage any person other than the Commonwealth or impose any liabilities on them for actions taken before the TCO's effective date.
Failure to comply with the requirements of the Customs Act 1901, including the proper application and assessment of TCOs, may result in legal consequences. For instance, if an entity knowingly provides false information in a TCO application, they could be subject to civil or criminal penalties. The maximum penalties for such offences can include substantial fines and, in some cases, imprisonment. These penalties are intended to ensure the integrity of the tariff concession scheme and to protect the interests of all stakeholders involved in the customs process.