EXPLANATORY STATEMENT
Tariff Concession Instrument No. 0618421
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.
Sunbeam Corporation Ltd applied for a TCO in respect of certain beer dispensers on 10 November 2006.
Instrument
TCO No 0618421 was made on 2 February 2007. It declares that those certain beer dispensers 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. 0618421 is taken to have come into force on 10 November 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. 0618421, enacted in 2007, amends the Customs Act 1901 to address the issue of customs duty rates on imported goods. The instrument was introduced to provide a mechanism through which the Chief Executive Officer of Customs can grant tariff concessions, thereby reducing customs duty on specific goods that are not produced domestically and have no substitutable goods in Australia. This initiative was enacted by the Australian government to encourage imports of goods that are not manufactured locally, thereby supporting trade and economic growth while ensuring that domestic industries are not unfairly disadvantaged. The primary objective of this legislation, as articulated in the explanatory statement, is to streamline the application process for tariff concessions and ensure transparency through public consultation.
Scope and Application
The Tariff Concession Instrument No. 0618421 under the Customs Act 1901 applies to goods specified in the application, in this case, certain beer dispensers, and is subject to the approval of the Chief Executive Officer of Customs (CEO). The Act provides a mechanism for reducing customs duty rates on certain imported goods, provided that no substitutable goods are produced in Australia in the ordinary course of business. The application of this Instrument is effective from the date the application was lodged, meaning that the concession applies retroactively from that date. This legislation is applicable on a national level within Australia, and the application process is subject to the conditions outlined in sections 269C and 269SJ of the Act. Notably, the Act excludes certain goods from eligibility for a Tariff Concession Order, as specified in section 269SJ. The CEO's decision to grant a Tariff Concession Order is informed by the application's compliance with the core criteria, as stipulated in section 269C, which includes the absence of substitutable goods produced in Australia. The CEO's decision is also guided by public consultation, as mandated by subsection 269K(1) of the Act, although in this instance, no submissions were received. The TCO does not disadvantage any person other than the Commonwealth nor impose any liabilities on them in respect of actions taken prior to the TCO's effective date.
Key Provisions
The Customs Act 1901, particularly Part XVA, provides the legal framework for the creation and application of Tariff Concession Orders (TCOs). A TCO allows for a lower rate of customs duty on specific goods (section 269F). The Chief Executive Officer of Customs (CEO) is responsible for making these orders if the application meets certain criteria, notably that no substitutable goods were produced in Australia on the date the application was lodged (section 269C). Substitute goods are those that can be produced in Australia and serve the same purpose as the goods in question (sections 269D and 269E). The CEO must also ensure that the goods do not fall within the prohibited category specified in section 269SJ. If these criteria are satisfied, the CEO must issue a written order declaring the goods subject to a specific lower duty rate as listed in Schedule 4 of the Customs Tariff Act 1995.
The obligations imposed by the Act on the parties involve ensuring that any application for a TCO is made in good faith and with all necessary information to demonstrate that the criteria are met. The CEO is required to publish a notice in the Gazette inviting submissions from interested parties, allowing for public input before making a decision (subsection 269K(1)). Additionally, the Act stipulates that the TCO will be deemed to come into effect on the date the application was lodged (subsection 269S(1)). This means that from that date, the lower duty rate applies, although it does not affect any rights or liabilities incurred before the registration date (subsection 269S(2)).
Failure to comply with the requirements set out in the Customs Act 1901 can result in civil or criminal penalties. Although specific penalties for breaches related to TCOs are not detailed in the provided text, general provisions under the Customs Act may include fines or imprisonment. The maximum penalties could vary depending on the nature and severity of the breach, and are typically outlined in other sections of the Act or related legislation. It is also worth noting that the Act ensures that the rights of importers are positively impacted, allowing them to apply for a refund of duty on goods imported since the TCO came into effect (paragraph 126(1)(r) of the Regulations).