EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0612225
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.
Ken Williams Marine Supplies applied for a TCO in respect of certain inflatable water ski tubes on 24 July 2006.
Instrument
TCO No 0612225 was made on 13 October 2006. It declares that those certain inflatable water ski tubes 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. 0612225 is taken to have come into force on 24 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 for the imposition of customs duties on imported goods. Under Part XVA, the Act facilitates the creation of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs to grant tariff concessions on certain goods. This mechanism was introduced to address the need for a flexible and responsive approach to tariff regulation, particularly in cases where goods are not produced domestically or where domestic production would be uneconomic. The policy objective is to support Australian industries and consumers by lowering the cost of imported goods where appropriate, while ensuring that such concessions do not undermine the revenue base or the competitive position of domestic industries. The instrument in question, Tariff Concession Instrument No. 0612225, was made in response to an application by Ken Williams Marine Supplies for tariff concessions on certain inflatable water ski tubes, effective from 24 July 2006. The instrument was published in the Gazette with no objections received, and it came into force on the date of application lodging.
Scope and Application
The Customs Act 1901, specifically Part XVA, governs the making of Tariff Concession Orders (TCOs) by the Chief Executive Officer of Customs. This Act applies to any person or entity seeking to import goods into Australia and who can demonstrate that the goods they wish to import are not produced in Australia in the ordinary course of business and have no substitutable goods available domestically. The application of this Act is national, covering the entire Commonwealth of Australia. It is worth noting that goods specified in section 269SJ of the Act are excluded from the possibility of being subject to a TCO. The Act also allows for the extension or restriction of application through subordinate instruments, which can include regulations and further legislative amendments. The Tariff Concession Instrument No. 0612225, which was made on 13 October 2006, is an example of such an instrument, where the CEO was satisfied that the application met the core criteria and subsequently made the order to provide a lower rate of customs duty on certain inflatable water ski tubes, reducing the duty from the general rate of 5% to free. This demonstrates how the Act can be applied to specific goods to provide tariff relief where appropriate.
Key Provisions
The Tariff Concession Instrument No. 0612225, made under section 269F of the Customs Act 1901, sets out the conditions for a tariff concession order (TCO) for certain inflatable water ski tubes. Section 269C of the Act states that the Chief Executive Officer (CEO) of Customs must consider whether no substitutable goods were produced in Australia on the day the application was lodged (section 269C(1)). If the CEO is satisfied that the core criteria are met, they must make a written order declaring the goods subject to the TCO (section 269P(3)). In this case, the CEO determined that no substitutable goods were produced in Australia and declared that the inflatable water ski tubes are subject to item 50 of Schedule 4 to the Customs Tariff Act 1995, effectively setting their duty rate at free.
The obligations imposed by the Act on the parties involved are primarily on the CEO of Customs, who must ensure that the application meets the core criteria before making the TCO. The applicant, in this case Ken Williams Marine Supplies, must submit a valid application and provide any necessary information to support their case (section 269F). Additionally, the CEO is required to publish a notice in the Gazette inviting any interested parties to submit submissions if they believe the TCO should not be made (subsection 269K(1)).
Failure to comply with the provisions of the Customs Act 1901 may result in civil or criminal penalties, depending on the nature and severity of the breach. The Act does not specify the exact penalties for non-compliance with the TCO provisions, but general penalties for breaches of the Customs Act can include fines and imprisonment. The maximum penalties for contravening the Customs Act can vary significantly depending on the specific breach but may include fines of up to $22,200 for individuals and $111,000 for corporations, along with potential imprisonment terms. These penalties reflect the seriousness with which the Australian government treats breaches of customs regulations.