EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612056
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.
Dometic Pty Ltd applied for a TCO in respect of certain refrigerators on 20 July 2006.
Instrument
TCO No 0612056 was made on 13 October 2006. It declares that those certain refrigerators 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. 0612056 is taken to have come into force on 20 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 Australian Parliament, establishes a framework for the application of customs duty and includes provisions for Tariff Concession Orders (TCOs) to be made by the Chief Executive Officer of Customs. The act aims to provide relief to importers of specific goods by lowering the rate of customs duty applied to them, provided certain criteria are met. The Tariff Concession Instrument No. 0612056, published on 13 October 2006, was introduced to address the application by Domestic Pty Ltd for a tariff concession on certain refrigerators. This instrument, which was made under the authority of the Customs Act, aims to facilitate the importation of these goods by reducing the customs duty rate from the general 5% to 0%, thereby aligning with the policy objective of providing economic benefits and supporting import activities without imposing any additional liabilities on importers.
Scope and Application
The Customs Act 1901, as supplemented by Tariff Concession Instrument No. 0612056, pertains to the application and implementation of Tariff Concession Orders (TCOs) which are issued by the Chief Executive Officer of Customs. The Act applies to any person or entity seeking a reduction in customs duty on specified goods, provided the goods do not fall within the exclusions outlined in section 269SJ of the Act. The TCO scheme is available for goods that are not produced in Australia in the ordinary course of business, as defined by sections 269D and 269E of the Act, and where no substitutable goods exist domestically. The geographic reach of this legislation is national, as it operates under the authority of the Commonwealth. Instrument TCO No. 0612056, which came into force on 20 July 2006, pertains specifically to certain refrigerators and grants them a duty-free status under item 50 of Schedule 4 to the Customs Tariff Act 1995. The instrument does not affect existing rights or impose liabilities for actions taken prior to its effective date. The Act also mandates that the CEO must publish notices in the Gazette inviting public submissions on TCO applications, though in this instance, no objections were received.
Key Provisions
The main operative sections of the Tariff Concession Instrument No. 0612056 are sections 269C, 269F, 269P, and 269K of the Customs Act 1901, which establish the process for applying for and granting Tariff Concession Orders (TCOs). Section 269F allows a person to apply to the Chief Executive Officer (CEO) of Customs for a TCO in respect of goods. If the application meets the core criteria outlined in section 269C, such as no substitutable goods being produced in Australia on the date of the application, the CEO must make a written order, a TCO, specifying the lower rate of customs duty for those goods (section 269P(3)). As soon as practicable after accepting a TCO application, the CEO must publish a notice in the Gazette inviting any person to submit reasons why the TCO should not be made, as per section 269K(1).
The Act imposes several obligations and requirements on the parties it governs. Firstly, applicants for a TCO must ensure their applications are made in accordance with the requirements of section 269F. They must provide sufficient information to enable the CEO to determine whether the application meets the core criteria. The CEO is required to assess the application against these criteria and, if satisfied, must make a TCO as per section 269P. Additionally, the CEO must publish a notice in the Gazette to invite submissions opposing the TCO, as stipulated in section 269K(1). The CEO must also consider any submissions received and decide whether to proceed with the TCO.
The Act outlines various consequences for non-compliance or breach of its provisions. While the Explanatory Statement does not explicitly detail specific offences, penalties, or consequences for breach in relation to TCOs, the broader Customs Act 1901 and associated regulations do provide for penalties. For example, section 228 of the Customs Act prescribes penalties for breaches such as making false or misleading statements, which could include fines or imprisonment. Similarly, failure to comply with requirements for duty refunds under the Regulations could result in financial penalties. The maximum penalties for such breaches would be determined by the specific nature of the offence and the relevant sections of the Act or Regulations.
In summary, Tariff Concession Instrument No. 0612056, under the Customs Act 1901, allows for the application of lower customs duty rates on specified goods if certain criteria are met. The Act details the process for applying for and granting these concessions, as well as the obligations of the applicant and the CEO. While the specific penalties for non-compliance are not detailed in the Explanatory Statement, they are governed by broader provisions within the Act and associated regulations, which could include fines or imprisonment for serious breaches.